Federal Reserve: Worst of recession is over

On Wednesday, the Federal Reserve has suggested that the worst of the recession in the United States is over but will remain weak for some period of time.

Federal Reserve Chairman Ben Bernanke believes that the economy is gettng better, the worst part of the recession is over and consumer spending is growing once again. However, the central bank's efforst of easing credit controls by keeping the interest rate between zero and 0.25 per cent will be for an extend period of time to continue growth. The Fed's comments came as recent figures show the economy is growing. There were few job cuts in the month of July, United States exports rose two per cent, worker productivity increased and the consumer is out shopping again. Mark Vitner, economist at Wells Fargo, told BBC News, "It is not all that surprising, it acknowledges a lot of what we have been seeing, that conditions are stabilising and the recession may be ending." However, it may not be all sunshine and lollypops. A recent Congressional panel has warned that if unemployment increases and property value declines then banks will incur further losses. Chairman of the panel Elizabeth Warren said, "The financial system will remain vulnerable to the crisis conditions that Tarp [the Treasury's bail-out program] was meant to fix. No one has a good handle how much is out there. The problem of troubled assets is especially serious for the balance sheets of small banks."