Federal Reserve Stands Pat

The lead article in today’s New York Times, “Federal Reserve Slashes Outlook for U.S. Growth,” means more bad news for President Obama as he struggles to improve the economy ahead of the 2012 elections.

The Fed revised downward its forecast of U.S. growth from more than 3 percent to 2.5 to 2.9 percent and also predicted that the unemployment rate would not drop below 8.5 percent by the end of 2012.

However, despite these dire predictions, the Fed took no further action to spur the economy, being concerned with non-existent inflation instead (or being intimidated by Republican lawmakers). The Fed did criticize Congress for lack of action, but that’s a pretty easy shot at an institution hovering around 10 percent approval ratings in the polls.

The unemployment rate figures are due out on Friday, and they are likely to spark another round of criticism of President Obama’s handling of the economy. With more than 25 million people unemployed, the President needs to keep pushing his jobs bill, one piece at a time if necessary.

Meanwhile, with Occupy Wall Street protests spreading around the country, the President faces criticism from his left flank as well. How he will thread this gauntlet to win reelection remains to be seen — though with the Republicans currently imploding in their primary race to replace him, he may yet received a second term as a gift.