The Fed's philosophy was to not act against asset bubbles on the way up, as hard to identify and dangerous to prick, but to ease aggressively after they burst.

Judge as of 2009, against the Fed's pre-crisis policy approach (the 'Greenspan doctrine' or 'mop up after'), as shown in Fed officials' speeches (for example Greenspan 2002, Bernanke 2002) and the Fed's post-bubble actions (2001–2003). True: these sources show the Fed held that bubbles are hard to identify before they burst and that using policy to deflate them is risky or damaging, and that it should instead ease aggressively after a bust. Mostly true: the doctrine is accurately described, but one nuance is lost, for example that the Fed's main reason was ineffectiveness or collateral damage rather than 'danger'. Mixed: one half (not leaning against bubbles) is supported but the other (aggressive easing after a bust) is not. Mostly false: the description substantially misstates Fed thinking. False: the Fed's stated approach was to actively target asset bubbles.

Set before the research began.

1. E1 Interim budget to decide market direction The Economic Times (Times of India group) · 15 February 2009

   “The intellectual justification for the Greenspan idea ��� was that identifying equilibrium levels of asset prices is difficult; and policy tools to prick or limit bubbles are limited.”

2. E2 FRB: Speech, Greenspan -- Economic volatility -- August 30, 2002 Board of Governors of the Federal Reserve System · 30 August 2002

   “Some have asserted that the Federal Reserve can deflate a stock-price bubble--rather painlessly--by boosting margin requirements. The evidence suggests otherwise.”

3. E3 FRB Speech, Bernanke -- Asset-price "bubbles" and monetary policy -- October 15, 2002 Board of Governors of the Federal Reserve System · 15 October 2002

   “Alan Blinder has likened bubble-popping strategies to sticking a needle in a balloon; one cannot count on letting out the air slowly or in a finely calibrated amount.”

4. E4 FRB Speech, Bernanke -- Asset-price "bubbles" and monetary policy -- October 15, 2002 Board of Governors of the Federal Reserve System · 15 October 2002

   “The 1987 stock market crash is a real-world example of how monetary policy aimed at macro stability coupled with other types of policy emphasizing financial stability can minimize the economic fallout of a sharp decline in asset prices.”

Bernanke's 2002 speech compares popping a bubble to sticking a needle in a balloon (E3), and Greenspan's 2002 speech says the evidence does not show a stock-price bubble can be deflated painlessly by raising margin requirements (E2). A 2009 independent account says the case for the Greenspan approach was that bubbles are hard to identify and policy tools to prick them are limited (E1). Together these support the claim that the Fed did not lean against bubbles because they were hard to spot and risky to prick. Bernanke's speech also backs responding after a crash with policy aimed at macroeconomic stability (E4), but the evidence does not explicitly show "aggressive" easing after 2001, and part of the Fed's reasoning was that the tools would not work, not only that they were dangerous.