Some market observers have been concerned that Federal Reserve actions could give rise to moral hazard . A Government Accountability Office critic said that the Federal Reserve Bank of New York 's rescue of Long-Term Capital Management in 1998 would encourage large financial institutions to believe that the Federal Reserve would intervene on their behalf if risky loans went sour because they were " too big to fail . " A contributing factor to the rise in house prices was the Federal Reserve 's lowering of interest rates early in the decade . From 2000 to 2003 , the Federal Reserve lowered the federal funds rate target from 6.5 % to 1.0 % . This was done to soften the effects of the collapse of the dot-com bubble and of the September 2001 terrorist attacks , and to combat the perceived risk of deflation
September 2001 terrorist attacks
September 11 attacks
Subprime mortgage crisis