Updated from 12:27 p.m. to reflect Kevin Warsh's age was 35, not 25 at the time, and additional comments from Chairman Bernanke.
NEW YORK (TheStreet) -- When the financial crisis was seemingly getting worse by the day, the Federal Reserve knew it had to act, but some were concerned about future implications. In Jan. 2008, it didn't truly understand how bad the situation would be become.
The Federal Reserve released the transcripts from its 2008 meetings, including the unscheduled meetings which took place, as the financial crisis worsened. The Fed normally releases these transcripts on a five-year lag, showing the breadth and scope of the conversations that took place during the meeting, which sets monetary policy.
In the Jan. 21 unscheduled meeting, Federal Reserve Chairman Ben Bernanke and his colleagues at the Federal Open Market Committee (FOMC) took action to cut the interest rate by 75 basis points to 3.5%, noting that action had to be taken, and that waiting for the regularly scheduled meeting on Jan. 30, would be damaging in ways the FOMC could not begin to imagine.
Following the run-down of what had gone on in the previous few days by New York Federal Reserve President Bill Dudley, Bernanke knew he had to act, even if it meant bailing out stock investors. "Obviously, it is not our job to target stock values or to protect stock investors, but I think that this is a symptom of both sharply mounting concerns about the economy and increasing problems in credit markets," Bernanke said in the transcript.