The LEAST of Bernanke’s problem will be the economy….
Bernanake…A Republican hired on during the Bush administration, would be probably forced to give up his job if he initiates a stimulus kick with a Romney win come election day….
Even if Obama wins and the Senate goes GOP he’d be under pressure…..
So what will the Fed do?
Economic prospects are “far from satisfactory,” Bernanke said, even though housing is showing signs of life, and retail sales and manufacturing picked up in July. Labor market stagnation is a “grave concern.” (Is there any other kind?) And the issues ailing the economy aren’t structural, in his view.
That means another kick in the pants is likely. While Bernanke said the “hurdle” for non-traditional policies may be high, the bar for additional action seems to be set quite low. The minutes from the Fed’s July 31-Aug. 1 meeting state that additional steps “would likely be warranted pretty soon” absent a “substantial and sustainable” improvement in the economy.
There are only two more meetings before the November election: Sept. 12-13 and Oct. 23-24. The Fed would probably prefer to stay out of the headlines in late October, which means September would be the most logical time to announce something beyond the existing maturity-extension program.
Many policy makers say they want to wait to see more economic data. Of course, there are always more data. What they mean is, they want to make sure there’s no major improvement in the economy before they take additional steps because every action will require an equal and offsetting counter action some day…..Share on Facebook