Bernanke: Recession Should End This Year

If the government’s plans work, the recession will be over by the end of this year, Ben Bernanke told senators today, making 2010 a “year of recovery.” But, the Wall Street Journal reports, the Federal Reserve chief pointed to continuing storm clouds, saying the US is undergoing a “severe contraction,” and that “the downside risks probably outweigh those on the upside.”

Bernanke said the Fed’s rosy forecast—which shows the economy shrinking 0.5%-1.3% this year, then recovering by 2.5%-3.25% in 2010—were based on the predicted benefits of the stimulus and low energy costs. Bernanke also promised that the Fed funds rate would stay “exceptionally low … for some time,” and touted new measures to increase transparency. (More Ben Bernanke stories.)