ForexNewsNow – A few hours from one of the most important speeches in US President Barack Obama’s term, in which he is said to announce new measures to boost the lackluster US job market in Congress, some may wonder if the current leader of the US economy is actually Federal Reserve Chairman Ben Bernanke.
The country has been hit by a major debt crisis, which followed on the heels of the recent subprime mortgage crisis. Both growth and employment figures are lamentable. The growing fears of a (double dip) recession are intensifying as the unemployment rate remains consistently above 9%.
The current pressure on Barack Obama to fix the US economy stems from Bernanke’s speech during the Jackson Hole Symposium on August 26th in which he officially announced that he would not launch a new round of quantitative easing (QE3) before the next Fed meeting on September 20th and 21st.
In refusing to inject more liquidity into the US economy, Bernanke was explicitly saying that it was Washington’s turn to assume its responsibilities vis-a-vis the lagging economy. Both Bernanke and IMF chief Christine Lagarde have insisted that US politicians must immediately act in order to avoid a major recession.
During Obama’s speech on Thursday, he is likely to apply Bernanke’s advice and implement top-down decision to try to reverse the current US economic trends. One hopes that, given the recent political squabbles between Republicans and Democrats over the raising of the debt ceiling, US politicians will be able to come together on this issue. Providing real solutions to curbing US unemployment must be made by the politicians at this point.
In case Barack Obama’s proposals in his speech on Thursday do not convince the markets that economic recovery is on the horizon, guess who will have the last word on September 20th? As usual… Mr. Bernanke.