The Federal Reserve is eying new steps to boost the economy, and the timing of the move could determine whether President Obama gets a badly needed boost himself.
The Fed meets next week, and according to the New York Times, some officials are pressing for immediate action.
With nothing significant expected to come out of Congress this year and with Europe in decline, the Fed meeting could be the last chance for anyone to inject some life into the economy before Election Day. If the Fed waits until its next scheduled meeting in September, the effect on the economy might not become apparent in time to do much good for the president.
Testifying before Congress last week, Bernanke said among the options the Fed is considering another round of “quantitative easing” to bring long term interest rates further down. Some are skeptical about how much good this would do, but Bernanke appears to think it could have a substantive effect.
Bernanke said the economy is slowing, a dreadful circumstance for a president during his reelection year, and unemployment is expected to remain at about its current level of 8.2 percent through Election Day.
Anything to that might perk the economy up enough to show light at the end of the tunnel could be invaluable to Obama. What’s more, a move by the Fed could help avert a catastrophe like a stock selloff, which could be the death knell for the Obama campaign.
And Bernanke’s own job could be at stake. In the heat of the GOP primaries Bernanke became a Republican punching bag, and Mitt Romney was among those who took the pledge to fire him.