Bernanke sees gradual economic recovery - Pittsburgh Business Times:

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In testimony before the congressional Joint EconomiCommittee Tuesday, Bernanke also warned another jolt to the banking systenm will stall any recovery. “We continue to expecrt economic activity tobottom out, then to turn up late this year,” Bernanke said. “Key elements of this forecast are our assessment that the housing market is beginninh to stabilize and that the sharpo inventory liquidation that has been in progress will slow over the next few The forecast assumes a continued gradual repair ofthe country’s financial and a relapse there could caused a recovery to stall, he said.
Whilse a recovery is now expected to the Fed’s forecast cautions that the rate of growtjh is likely to remain below its longer-ruj potential for awhile. Businesses will likely put off meaning unemployment will remain high even after economicgrowth resumes. Bernanke also believes inflation will remaijn low forsome time. A repor Tuesday from the Institute for Supplg Managementshowed U.S. service which make up 90 percent of the contracted at the slowest pace in six monthwin April, seen as another sign the recession is nearing an end.