Fed Chairman Ben Bernanke sees an end to the recession in just a few months, but expects unemployment to keep rising. Chip Reid reports.
>> Fed chairman Ben Bernanke walked a fine line today balancing hints of good news on the economy against signs of a long and painful recovery.
>> We are hopeful that the very sharp decline we saw beginning last fall through early this year will moderate considerably in the near term and that we'll see positive growth by the end of the year.
>> He cited positive news on housing. Pending home sales were up 3.2% in March.
>> If the housing market is beginning to stabilize.
>> Consumer spending he said is also up 2.2% in the first quarter and it will get a boost in coming months Bernanke said; from the presidents stimulus package. But the recovery will only gradually gain momentum he warned and with businesses nervous about hiring new workers unemployment will remain high even after the recovery is well under way.
>>We think that the unemployment rate will probably peak early in 2010 and then come down relatively slowly after that.
>> Bernanke defended the so called stress test that were delivered to 19 major banks today and will be publically unveiled Thursday. Background talking He argued that transparency will restore high confidence in the banks.
>> That's a very important part of this whole process is letting people see what is, what is on the banks balance sheets.
>> Treasury department sources say about 10 of the banks will be ordered to raise more capital to make sure they can survive if the recession becomes even worse. If the banks can't raise the money on their own the federal government has promised to back them up once again. Background talkingFormer Fed Governor Larry Meyer assumed spelling says it's necessary to make sure bells the banking system survives but that doesn't mean tax payers will be happy.
>> If they tell us that a, a dozen or more banks need more capital and it more than exhausts the funds that they have available that will be a very bad day for the markets.
>> But Bernanke says the stakes are so high on stabilizing the banks that failure to do so could stall this economic recovery. Jeff.
>> Alright Chip Reid in Washington. Thank you.
==== Transcribed by Automatic Sync Technologies ====
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