RTTNews - The economic recovery is likely to be impeded until financial markets are more stable, Boston Federal Reserve Bank President Eric S. Rosengren said Thursday.
Speaking before the Worcester Economic Club in Massachusetts, Rosengren said that while efforts of the Federal Reserve have helped, robust growth is not likely until 2010.
I believe the aggressive monetary and fiscal response to the crisis has no doubt helped provide the foundation for an economic recovery, Rosengren said in prepared remarks.
He added that positive growth is likely to return by the end of 2009, although it will take some time for that growth to be robust.
While I expect in the absence of significant further shocks that we will begin to see positive economic growth towards the end of this year, that growth is not likely to be robust enough to provide much improvement in labor markets until next year, he explained
However, Rosengren stressed that the Fed will remain committed to promoting an economic recovery through any means necessary, while still preserving price stability.
Looking beyond the recession, Rosengren said that evaluating the lessons of the downturn are necessary for a more resilient regulatory structure.
Specifically, he said that he hoped the debate would soon shift from recession to recovery.
I hope the debate will soon center on the nature of the recovery, rather than the severity of the recession, Rosengren said. It is a positive sign that some analysts are beginning to speculate on the likely nature of an economic recovery - and, indeed, that a talk focused on aspects of recovery is now quite relevant.
Still, the economy is likely to experience a slow recovery, due to the severity of the damage in the credit markets, loss of household wealth and jobs by consumers, a sharp drop in housing prices, and the global impact of the recession which will continue to hurt U.S. exports.
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