The Fed helps the re-election cause

Intentionally or not, the Fed gave a bit of a reprieve to the Republican efforts to hold the White House today. As everyone knows, they raised short-term rate to abate inflation. The consequence of this action is to imply that the economy is humming along just fine. An implication that is contrary to the worries raised by the employment numbers that came out last week.

Economists in round rooms . . . The Washington Post has it covered here: Predicting Growth, Fed Lifts Key Rate

The Fed's action appeared to dismiss concerns that the economic recovery is faltering again, just months before a presidential election that could hinge on perceptions of the economy's health. While presidents in the past have urged the Fed to keep rates as low as possible, President Bush characterized the Fed's last rate increase, in June, as a sign the economy is getting stronger.
But critics said that by blaming oil prices for the recent dip in economic growth, the Fed was playing down the role of weak job and income growth in cooling the economy.