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What did the Fed know, and when?

Readers of my stories and blog will know that I am obsessed with the quality of the government statistics. Very often mistakes in economic policy can be traced to data which is misleading or later revised.

One of the big puzzles is why the Fed kept raising rates in 2006, despite what we know now was the incipient weakening of the housing market. The minutes of the January 31, 2006 FOMC meeting, indicate a slight bit of concern with the housing market, but nothing significant: “Activity in the housing market appeared to continue at high levels.”