Chairman Ben Bernanke gave his first interview since taking the helm of the Federal Reserve, with CBS’ 60 Minutes today. In it he stated that the biggest issue that may continue to threat the U.S. economy is a lack of action on the part of the political process to stem a potentially prolonged recession. “The biggest risk that, you know, we don’t have the political will,” Bernanke said.
But he further added that stabilization of the banking sector is crucial to ensure an economy recovery. “Recovery is not going to happen until the financial markets and the banks are stabilized.” Fortunately, the chairman added that the banks regulated by the Fed are solvent. He also noted that the government’s is “going to take time and patience.” He reemphasized his position on the role of the political process, saying that “it’s going to take some support.”
During the questioning Bernanke stated that the era of “high living” ended with the collapse of the financial companies. It is also “hard to forecast exactly” the future trend in unemployment, he said. Bernanke also emphasized that the U.S. recovery will probably start in 2010, but that the bulk of the crisis will end by late this year.
