Probably the most important political news from this week is not Romney’s gaffes but the fact that the Federal Reserve decided they were going to take no farther action to reduce unemployment. From the Federal Reserve:

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

The state of the economy in the months going into an election is always important to the fate of an incumbent president. It is especially important this year with voters rating jobs/the economy as their top priority. Federal Reserve Chair Ben Bernanke believes the Fed still has some tools it could use to help increase employment but this announcement means the Fed is not going to use them. While the FOMC will meet again in mid September and could decide at that point to do more, it is likely any action they might take then will be too late to impact the election.

Since further stimulus from the state or federal government level is basically out of the question, this means President Obama will likely face the election with the same anemic economy we have now.