Federal Reserve Chairman Ben Bernanke suggested in an interview to air on Sunday that the U.S. recession could last through the year and said the biggest risk was that the political will needed to fix the fractured financial system could be lacking.
We won't be back to full employment. But we will, I hope, see the end of these declines that have been so strong in a last couple of quarters, he said, according to a transcript of the interview.
Bernanke told Congress in January the Fed believes there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.
In the rare on-record interview, he largely stuck to that view, while suggesting recent developments had dimmed the outlook a bit.
We'll see the recession coming to an end probably this year, Bernanke said. We'll see recovery beginning next year.
Government efforts to combat the crisis have come under fire as stock markets have plunged and unemployment has soared even as authorities have stepped in repeatedly to prop up firms such as insurer American International Group.
The Fed chairman said his greatest worry is that political leaders and the public will withdraw support for efforts aimed at stabilizing the shattered banking system.
The biggest risk is that, you know, we don't have the political will, he said. We don't have the commitment to solve this problem, and that we let it just continue.
In which case, we, we can't count on recovery.
(Reporting by Mark Felsenthal)