Explain how sub-prime mortgages hit the headlines

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you are Chairman of the FED. In early 2006 you noticed that M1 began to shrink. In other words it was showing negative growth. Economic growth was slowing, sub-prime mortgages hit the headlines, and fears were that we were in the 'R' word that nobody wanted to use at that time. Recession. As FED Chair what monetary policy and FED changes would you have implemented at that time?

Reference no: EM13208194

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