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Great Recession Timeline
(December 2007 - June 2009)The Great Recession was the most severe economic downturn since the Great Depression, triggered by the collapse of the U.S. housing market and the subprime mortgage crisis. It led to widespread bank failures, massive job losses, and a global financial crisis, prompting unprecedented government interventions such as bank bailouts and stimulus programs. More Less
Housing Bubble and Precursors
Federal Reserve begins raising interest rates
Jun 29, 2004
The Federal Reserve began a series of interest rate hikes, raising the federal funds rate from a historic low of 1% to 5.25% by June 2006. The rising rates made adjustable-rate mortgages increasingly expensive, straining homeowners who had taken on risky loans during the housing boom.
Image source: History of Federal Open Market Committee actions
US housing bubble reaches its peak
Jan 1, 2006
US home prices peaked in early 2006 after years of rapid appreciation fueled by speculative buying, lax lending standards, and securitization of subprime mortgages. Prices soon began to decline, setting the stage for widespread defaults and foreclosures.
Image source: 2000s United States housing bubble
Home prices begin nationwide decline
Feb 1, 2007
National home prices began falling for the first time since the Great Depression, according to the S&P/Case-Shiller index. Falling values left many borrowers owing more than their homes were worth, accelerating defaults on subprime loans.
Image source: 2000s United States housing market correction
New Century Financial files for bankruptcy
Apr 2, 2007
New Century Financial, one of the largest US subprime mortgage lenders, filed for Chapter 11 bankruptcy after its creditors cut off funding. Its collapse was an early signal that the subprime lending industry was unraveling.
Financial Crisis
Two Bear Stearns hedge funds collapse
Jun 20, 2007
Two hedge funds managed by Bear Stearns that were heavily invested in subprime mortgage-backed securities collapsed, forcing investors to absorb massive losses. The failure revealed how deeply exposed major financial institutions were to toxic mortgage assets.
Image source: Bear Stearns
BNP Paribas freezes funds, credit markets seize up
Aug 9, 2007
French bank BNP Paribas froze three investment funds, citing its inability to value assets tied to US subprime mortgages. The move triggered a global freeze in interbank lending as banks stopped trusting each other's balance sheets, marking the start of the worldwide credit crunch.
Image source: 2007–2008 financial crisis
Northern Rock suffers bank run
Sep 14, 2007
Depositors queued outside branches of Britain's Northern Rock after the Bank of England announced emergency support for the mortgage lender. It was the first bank run in the UK in over 140 years, and the bank was eventually nationalized in February 2008.
Image source: Northern Rock
Citigroup reports massive subprime-related losses
Nov 4, 2007
Citigroup disclosed billions of dollars in losses and write-downs tied to subprime mortgage-backed securities. Major banks across the world soon reported similar losses, eroding confidence in the global financial system.
Image source: Citigroup
US economy enters recession
Dec 1, 2007
The National Bureau of Economic Research later determined that the US economy entered recession in December 2007, following declines in employment, industrial production, and personal income. The recession would become the longest and deepest since World War II.
Image source: Great Recession
Bear Stearns sold to JPMorgan Chase
Mar 16, 2008
Investment bank Bear Stearns collapsed amid a liquidity crisis and was sold to JPMorgan Chase for just $10 per share, with Federal Reserve backing for toxic assets. The fire sale shocked markets and signaled that even major Wall Street firms were vulnerable.
Key Facts
- The Great Recession officially began in December 2007 and ended in June 2009, according to the National Bureau of Economic Research.
- It was triggered by the bursting of the U.S. housing bubble and the collapse of the subprime mortgage market.
- The bankruptcy of Lehman Brothers in September 2008 marked one of the most significant events of the crisis, intensifying global financial panic.
- U.S. unemployment peaked at 10% in October 2009, with millions of Americans losing their jobs and homes.
- Governments worldwide responded with major interventions, including the $787 billion American Recovery and Reinvestment Act of 2009 and bank bailouts under the Troubled Asset Relief Program (TARP).
Source
This Great Recession timeline was generated with the help of AI, using information found on the internet.
We work hard to keep these timelines accurate, but mistakes do get through. If you spot one, email us at [email protected] and we'll fix it for future visitors.
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