Luckily for the fragile US economy, both Sen. Obama and Sen. McCain have pledged to stay out of the Federal Reserve’s way and, for the most part, leave the economy to the economists.
In fact, the two politicians seem rather pleased with the Fed’s performance as of late. They both:
- praise and support Fed Chairman Ben Bernanke
- back the Fed’s moves to rescue Bear Stearns from bankruptcy and to support Fannie Mae and Freddie Mac
- say the Fed’s approach to interest rates would change little with a new administration
- will avoid meddling in interest-rate decisions
Still, whichever candidate is elected President will have a profound impact on the Fed’s direction. The next President will appoint three of seven Fed governors immediately due to vacancies. Obama or McCain will also decide whether or not to nominate Bernanke for a second 4-year term, starting in 2010. Neither candidate, as of now, appears likely to fire the Fed chairman.