Fed faces political heat in weighing more economic stimulus
With Europe falling deeper into crisis and Congress paralyzed, only one institution may have the flexibility to try to keep the U.S. economic recovery on track: the Federal Reserve.
But the Fed faces a daunting burden. Any new action could provoke tough political criticism. Republicans, in particular, have expressed deep concern about the measures taken by the Fed to support the economy — and could be doubly upset if new efforts goose the stock market and are perceived to work in favor of President Obama’s reelection.
“The Fed is going to try to do the right thing,” said Vincent Reinhart, a longtime Fed economist and now top U.S. economist at Morgan Stanley. But, he added, “The headline they most worry about is ‘The Fed acts to help the incumbent.’?”
The central bank fiercely guards its independence from politics. But its unprecedented efforts over the past four years — rescuing banks and printing trillions of dollars in new money to support the economy — have raised concerns among conservatives about a rising risk of runaway inflation and a weakened dollar.
full: http://www.washingtonpost.com/business/economy/fed-faces-political-heat-in-weighing-more-economic-stimulus/2012/06/05/gJQAht78GV_singlePage.html
