US Federal Reserve Chairman Ben Bernanke told Congress yesterday that the US economy is on track for a recovery, but it will be slow.
"I am hopeful that the recession will end in the second half of this year due to aggressive monetary and fiscal policies, and the operation of typical business cycle mechanisms." said Yellen, president of the Federal Reserve Bank of San Francisco.
US Federal Reserve chairman Ben Bernanke has forecast an end to the US recession but warns any future shock to the financial system would jeopardise that recovery.
"We continue to expect economic activity to bottom out and then to turn up later this year," he said.
"Even after recovery gets underway, the rate of growth of real economic activity is likely to remain below its longer run potential for a while," he said.
"We expect that the recovery will only gradually gain momentum and that economic slack will diminish slowly.
The American economy has been in recession for one and a half years, even as the battle for economic revival centred on bailout programmes continues to progress.According to non-profit research organisation National Bureau of Economic Research, the US officially slipped into recession in December 2007.
To boost the nation's sagging economy, the Federal government has unveiled unprecedented measures including the mega $700-billion bailout package and buying stakes in financial entities.
In addition, the Obama administration recently came up with a public-private partnership plan, which is aimed at mopping up toxic assets worth $1 trillion from the financial system. The US has also become strict on executive compensation on Wall Street and has introduced pay restrictions on companies receiving taxpayers money.
Meanwhile, in the fourth quarter of 2008, American GDP contracted the most in 26 years at 6.3%.
