An article from money.cnn.com reveals that the Federal Reserve officials had no idea that a deep recession was coming, and thus the hesitation in their action had a deep impact in the US economy as well as its ability to recover.
On Friday morning, Feb 21, the Federal Reserve released more than 1500 pages of transcript, featuring "word-for-word" its 14 policy making meetings and conference call in 2008. These transcript revealed the uncertainty of the Fed's officials about the US's economic outlook leading up to their drastic actions.

"Meeting just a day after Lehman Brothers filed for bankruptcy in September 2008, they couldn't agree on whether their decision to allow the investment bank to fail was the right move..."

 It was long before the magnitude of the crisis was finally sinking in with officials: The Fed decided to retreat interest rate to near zero and remained its position five years later. Even then, the Fed was still overly optimistic in its reports and upcoming forecasts. Predictions indicated that unemployment would peak at 8.25% in 2010, whereas in reality, it peaked at 10%.

Many economists had successfully predicted the recession of the economy long before it ever happened. Why couldn't the Federal Reserve? This is a very good question to ponder. Please give your thoughts on this blog post / articles.

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Federal Reserve underestimated the crisis