I'm glad I waited all day for this update.
Politically, this could really hurt Obama. I'm already seeing conservatives bash Obama because he's not doing enough and his policies are failing, causing Bernanke to come in and take extreme measures. Obama has to get out front on this and control the message, which he has historically been very bad about. If Obama controls the narrative, it could be a win-win for him. I see the following results:- it works: the economy starts to recover, unemployment decreases, the pressure is off. Also, it could be used to prove that stimulative efforts work well and Obama can potentially earn some political capital to use on increased spending on his agenda.- it doesn't work and unemployment stays the same: the White House and Congress have always known that even if they can't/won't do anything legislatively, they had the Fed to fall back on, just in case. If the Fed's work fails, they now have more urgency to get something done and will MAYBE cooperate to get something passed or it will drive the Democrats to fight stronger than they have and paint the Republicans as the obstructionist, worthless party they are and win some elections (in 2014).I am not optimistic the Democrats will do that, though...
I don't really see a threat. The average person does not have any opinions about QE or what the Fed does generally. People should care more, but they just don't.
That's a good point. I actually just read an article that said 80% of voters say they are already confident who they'd vote for and of the 6% who say they are completely undecided, they are not paying any attention to the race and are most likely not going to vote at all.Still, removing the Fed from the equation may still spur Congress to act, although nothing else yet has, so it's probably still unlikely.
Seems to be having a nice effect on the stock market, at least. DJIA is up 1.5% as of now.