March 17, 2009 1:15:18 am
Americas recession probably will end this year if the government succeeds in bolstering the banking system,Federal Reserve chairman Ben Bernanke said on Sunday in a rare television interview. In carefully hedged remarks in a taped interview with CBS 60 Minutes,Bernanke seemed to express a bit more optimism that this could be done.
Still,Bernanke stressed as he did to Congress last month that the prospects for the recession ending this year and a recovery taking root next year hinge on a difficult task: getting banks to lend more freely again and getting the financial markets to work more normally. Weve seen some progress in the financial markets,absolutely, Bernanke said. But until we get that stabilised and working normally,were not going to see recovery. But we do have a plan. Were working on it. And,I do think that we will get it stabilised,and well see the recession coming to an end probably this year.
Even if the recession,which began in December 2007,ends this year,the unemployment rate will keep climbing past the current quarter-century high of 8.1 per cent,Bernanke said. A growing number of economists think the jobless rate will hit 10 per cent by the end of this year.
Asked about the biggest potential dangers now,Bernanke suggested a lack of political will to solve the financial crisis. He said,though,that the US has averted the risk of plunging into a depression. I think weve gotten past that, he said.
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Its rare for a sitting Fed chief to grant an interview,whether for broadcast or print. Bernanke said he chose to do so because its an extraordinary time for the country,and it gave him a chance to speak directly to the American public.
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