- James I. Clark III
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Bernanke Sees Some Light at the End of a Long Tunnel
Encouraging data on home and auto sales, homebuilding and consumer spending is seen by Federal Reserve Chairman Ben Bernanke as “tentative signs” that the recession may be moderating. Still, he cautions that lasting recovery depends on the government’s success in stabilizing the reeling financial markets and unfreezing credit.
In remarks to faculty and students at Morehouse College in Atlanta, Bernanke said “Recently, we have seen tentative signs that the sharp decline in economic activity may be slowing. A leveling out of economic activity is the first step toward recovery. To be sure, we will not have a sustainable recovery without a stabilization of our financial system and credit markets.”
Analysts expect the economy to shrink between two and 2 ½ percent during the second quarter of 2009, a better showing than the 6.3 percent contraction reported for the fourth quarter of 2008. Although numbers for the first three months of 2009 will not be available until the end of April, some economists believe it will be in the four or five percent range – or perhaps higher.
“The current crisis has been one of the most difficult financial and economic episodes in modern history,” according to Bernanke.