Obama, Bernanke discuss need for deficit reduction

FORESIGHT. In this July 14, 2011 file photo, Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington, before the Senate Banking Committee hearing to deliver the semiannual Monetary Policy Report. Bernanke told Congress in July that the Fed was ready to act if the economy weakened. AP/Susan Walsh

WASHINGTON — President Barack Obama and Federal Reserve Chairman Ben Bernanke met in the Oval Office on Wednesday to discuss the need for long-term deficit reduction and the European financial crisis.

The meeting came a day after the Fed announced it would offer super-low interest rates for two more years. The move was an unprecedented step to stem an economic free fall that dragged the stock market down earlier this week.

After the Dow Jones industrial average surged on Tuesday, it fell again sharply on Wednesday, wiping out Tuesday’s gains.

Treasury Secretary Timothy Geithner, White House chief of staff Bill Daley and top White House economist Gene Sperling were also in the meeting. The White House said it was the third time Obama has met with Bernanke this year.

The president also met separately with Geithner on Wednesday, and was scheduled to meet with business leaders later in the week.

The series of economic meetings follow the downgrade of the U.S. credit rating after the partisan fight over the debt ceiling increase and deficit reduction, as well as the latest jobs report showing the unemployment rate still sitting above 9 percent.