Bernanke: Adjustment Is Mostly Over

Ben Bernanke for the first time acknowledged the possibility of a US recession, but he also voiced optimism that “much” of the adjustment period was over, the Wall Street Journal reports. His testimony before Congress seemed to suggest an end to aggressive stimulus measures—noting that rates had already been cut “substantially” and inflation was still a “source of concern.”

Though Bernanke admitted that real GDP will likely remain flat or even contract in the first half of 2008, he believes that the economy will improve later this year. But he warned “the uncertainty attending this forecast is quite high and the risks remain to the downside.” He also pointedly omitted his oft-repeated promise to intervene in a “timely manner as needed.”