Fed Chairman Says American Economy Is Poised to Grow

JACKSON HOLE, Wyo. — Ben S. Bernanke, the chairman of the Federal Reserve, offered his most hopeful assessment in more than a year on Friday, asserting that “the prospects for a return to growth in the near term appear good.”

In a much-awaited speech here to central bankers and economists from around the world, Mr. Bernanke went beyond the Fed’s most recent assessment that the nation’s economy was “leveling out” and that the recession was ending.

Reed Saxon/Associated Press
Ben S. Bernanke, the Federal Reserve chairman, arrives at the morning session of the conference in Jackson Hole, Wyo., on Friday.

Noting that short-term lending markets are functioning “more normally,” that corporate bond issuance is strong and that other “previously moribund” securitization markets are reviving, Mr. Bernanke said that both the United States and other major countries were poised for growth.

In emphasizing not just the imminent end of the recession — the worst since at least the early 1980s if not since the Great Depression — but also the “good” chances of actual growth, Mr. Bernanke’s assessment was in some ways surprising.

Despite encouraging signs on many fronts, American retailers have reported unexpectedly weak sales in the last week — a sign that that consumer spending could drag down economic growth in the months ahead. And on Thursday, the Labor Department reported that new unemployment claims jumped again.

The Fed chairman’s added hopefulness may have reflected the unexpectedly good news from other parts of the world: Germany and Japan both reported positive economic growth this week, an unexpected rebound from their own recessions.

The Fed chairman cautioned that problems remained, and warned that regulators would have to impose much tougher capital requirements on major financial institutions to ensure that they can better withstand the kind of cash crunch that crippled the global financial system last fall.

“Strains persist in many financial markets across the globe,” Mr. Bernanke said, speaking at the Fed’s annual symposium at this resort in the Grand Tetons. “Financial institutions face significant additional losses, and many businesses and households continue to experience considerable difficulty gaining access to credit.”

Repeating the caution that Fed officials and most private forecasters have expressed in recent weeks, Mr. Bernanke predicted that the economic recovery “is likely to be relatively slow at first, with unemployment declining only gradually from high levels.”