Obama, Bernanke Discuss U.S. Recovery, Europe at White House

President Barack Obama and Federal Reserve Chairman Ben S. Bernanke met today to discuss the European economic crisis and the outlook for the U.S. recovery and deficit reduction.

The afternoon meeting in the Oval Office of the White House was their third this year, White House and Federal Reserve officials said.

Obama and Bernanke “discussed the outlook for the recovery and for jobs as well as fiscal issues, including the need to tackle long-term deficit reduction,” a statement released afterward by the administration said. “They also discussed the situation in Europe.”

The meeting wasn’t listed on the president’s public daily schedule. It was revealed by White House press secretary Jay Carney during the regular White House briefing.

The Fed said yesterday it would keep borrowing costs at an all-time low to revive a recovery that’s “considerably slower” than expected. The Standard & Poor’s 500 Index dropped 4.4 percent to 1,120.76 amid concern the European sovereign debt crisis is worsening. The market benchmark yesterday had its biggest jump in more than two years. Treasuries rallied as a $24 billion sale of 10-year securities drew a record-low yield of 2.14 percent.

White House and Federal Reserve officials said the two men met previously on Jan. 12 and July 18. Because the Fed is an “independent body,” Carney said, Obama and Bernanke “speak broadly” about the U.S. and global economy.

On Jan. 12, Bernanke met with Obama and Treasury Secretary Timothy F. Geithner in the Oval Office, according to a copy of Bernanke’s schedule that was obtained under the Freedom of Information Act. No details were provided about the content of that meeting.

Economic Advisers

Geithner also attended today’s meeting, along with, National Economic Council Director Gene Sperling and White House chief of staff Bill Daley, according to the White House readout.

The session followed the Aug. 5 decision by Standard & Poor’s to downgrade its rating for U.S. debt to AA+ from AAA.

S&P’s decision was at odds with the other two main ratings companies, Moody’s Investors Service and Fitch Ratings, which continue to give top grades to U.S. debt.

The new rating is S&P’s second-highest and puts the U.S. on the same level as Belgium and New Zealand, and above Japan and China. Under S&P’s definitions, debt rated AA is barely different from AAA securities and shows that a borrower’s ability to “meet its financial commitment on the obligation is very strong.”

To contact the reporters on this story: Margaret Talev in Washington at mtalev@bloomberg.net; Jeannine Aversa in Washington at javersa@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net