Bernanke Gets Our Hopes Up
Posted on May 5, 2009
The good news: Federal Reserve Chairman Ben Bernanke believes the U.S. economy may show signs of bouncing back before 2010—yay! The bad news: Bernanke also believes that aftershocks from the recession may continue to wreak havoc for a good while to come—sigh.
The Washington Post:
Testifying before the Joint Economic Committee, Bernanke’s assessment of the economy was decidedly more optimistic than the one he offered a couple of months ago, even as he stressed that many risks and challenges stand in the way of recovery.
In particular, Bernanke forecast that even once a recovery begins, it will be relatively slow, meaning that the nation will not return to full employment and full productive capacity anytime soon.
“We expect that the recovery will only gradually gain momentum and that economic slack will diminish slowly,” Bernanke said. “In particular, businesses are likely to be cautious about hiring, implying that the unemployment rate could remain high for a time, even after economic growth resumes.”
AP photo / Susan Walsh
Federal Reserve Chairman Ben Bernanke testifies on Tuesday before the Joint Economic Committee on Capitol Hill.