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Friday
Jan132012

Fed Officials Didn't See 2006 Housing Market Crash Coming

Mark Wilson/Getty Images(WASHINGTON) -- Top officials at the Federal Reserve had no idea in 2006 that the housing bubble was about to burst, according to newly released transcripts of closed-door Fed meetings.

“I think we are unlikely to see growth being derailed by the housing market,” said Chairman Ben Bernanke at the time.

The hundreds of pages unveiled on Thursday also show that Treasury Secretary Timothy Geithner, who was a Fed official, expressed confidence in September 2006 that “collateral damage” from housing could be avoided.

[CLICK HERE TO READ ALL OF THE TRANSCRIPTS]

Their views echoed the widely held beliefs of most economists and money managers who, at the time, were confident about growth and stock valuations.  Little did they know, apparently, that the housing bubble was just months away from bursting.

Copyright 2012 ABC News Radio

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