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The time needed for economic recovery will depend greatly on the pace at which financial and credit markets return to more-normal functioning, Federal Reserve Chairman Ben Bernanke said in a testimony before the House Budget Committee, underlining that the economy is likely to be weak for several quarters.
Because the time that will be needed for financial normalization and the effects of ongoing credit problems on the broader economy are difficult to judge, the uncertainty currently surrounding the economic outlook is unusually large, Bernanke underlined.
With the Congress to craft a new economic stimulus package, Bernanke said that “consideration of a fiscal package by the Congress at this juncture seems appropriate.”