Newly released transcripts reveal Fed officials underestimated the severity of economic conditions during the financial crisis. Officials repeatedly fretted about overstimulating the economy, only to realize time and again that they needed to redouble efforts to contain the collapse. Ben Bernanke was clearsighted in warning of the risk of a severe recession, but struggled to persuade his colleagues. Janet Yellen, then president of the Federal Reserve Bank of San Francisco, was even more alarmed. She and Eric Rosengren, president of the Federal Reserve Bank of Boston, were the most forceful advocates for stronger action. The Fed’s understanding of the crisis was clouded by its reliance on indicators that missed sharp changes in conditions. Officials also appeared to be biased toward worrying about the risk of inflation while downplaying the risks of rising unemployment. The transcripts also show, however, that Fed officials responded decisively in the final months of the crisis, heading off an even worse recession.