Bernanke Sees Recovery

As usual – stock markets rise on Bernanke’s positive comments.

Remember these comments. I wonder what he’ll say when things begin to fall apart? I’m willing to bet that the fault will not lie with the Federal Reserve.

I’m sure we’ll see ‘comprehensive reform’ – but it will be preceded by a comprehensive economic collapse.

We (Americans) are being setup for an historic fall.

jg – September 15, 2009
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SEPTEMBER 15, 2009, 11:44 A.M. ET

Bernanke Sees Recovery, Defends Fed Actions

By MAYA JACKSON RANDALL

Wall St. Journal

WASHINGTON -- U.S. Federal Reserve Chairman Ben Bernanke Tuesday said it's likely the recession has come to an end, but he reiterated that tight credit conditions and a soft labor market will prove to be a challenge.

Fed Chairman Ben Bernanke answers a question at a Brookings Institution forum.

From a technical point, the "recession is very likely over at this point," Mr. Bernanke said in a question-and-answer session at the Brookings Institution.

But he added that even if recovery is underway, it's still going to feel like a very weak economy because credit conditions remain tight and any decline in the unemployment rate will probably only happen gradually. He noted that one risk is that the economy will grow in the second half of 2009, but not enough to trigger a rapid recovery.

If there is only moderate economic growth, "employment will be slow to come down," he said. "It will come down, but it will take some time."

Meanwhile, Mr. Bernanke expressed confidence that policymakers will move forward on plans to overhaul the nation's finance rules.

"I remain pretty optimistic that a comprehensive reform will be coming," he said.

In response to a question about the securitization market, Mr. Bernanke said he expects the market "will come back." But he said he's seen "very encouraging" signs that the market is improving. Still, the market will be "simpler, smaller, less opaque" and subject to more oversight by regulators, all things that could constrain its growth for a period of time, said Mr. Bernanke.

The market probably "will not return to the size it was before," he said.

Write to Maya Jackson Randall at Maya.Jackson-Randall@dowjones.com