Page last updated at 08:24 GMT, Monday, 16 March 2009

Bernanke hopeful for US recovery

US Federal Reserve chairman Ben Bernanke
Mr Bernanke says the world came close to financial meltdown

The head of the US central bank, Ben Bernanke, has said he expects America's recession to end this year.

"This decline will begin to moderate and we'll begin to see a levelling off," the Federal Reserve chairman told the CBS 60 Minutes TV programme.

But he said the world had come very close to financial meltdown last year, before governments stepped in.

Mr Bernanke warned that the biggest risk to recovery would be a lack of political will to solve problems.

The BBC's Sarah Morris in Washington says it is unusual for the Federal Reserve chairman to talk to the media in this way - but Mr Bernanke said he decided to go ahead with the CBS interview because this was an extraordinary time.

His comments came after the UK government warned that the upcoming G20 meeting was critical if the world wished to avoid the economic turbulence seen in the 1930s.

Unemployment factor

Mr Bernanke told the US Congress in January he believed that the recession that took hold at the end of 2007 would end this year.

He stuck to that view in the interview while suggesting that recent developments may have set confidence back.

"We'll see recovery beginning next year," he said but added recovery could be put in jeopardy if "we don't have the political will".

He said a government fund of $500bn was stabilising the mortgage market and business lending was picking up.

The benchmark Dow Jones index rose by about 10% last week after plunging to 12-year lows.

However the US jobless rate jumped to 8.1% in February - the highest rate since December 1983.

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Washington Post With key rate near zero, Fed scopes out options - 4 hrs ago
Boston Globe Fed considers how to end recession - 10 hrs ago
Christian Science Monitor Signs of easing in US economic slide - 11 hrs ago
CNN Money US STOCKS-Surprise jump in housing starts ignites rally - 11 hrs ago
Reuters U.S. housing market offers hope on economy, stocks - 11 hrs ago

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