Bernanke Says Recession Is Possible

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Will there be a recession or not? That is everybody’s favorite games these days. Many people claim the country is already in a recession, others are hoping that the U.S. will somehow escape that fate. Today Fed Chairman Ben Bernanke said bluntly that their could still be a recession, despite measures to avoid it.

“It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States’ economic health. Under one rule, six straight months of declining GDP, would constitute a recession.

Bernanke said “a recession is possible” but he also said he expects more economic growth in the second half of this year and into 2009, helped by the government’s $168 billion stimulus package of tax rebates for people and tax breaks for businesses as well as the Fed’s aggressive reductions to a key interest rate.

Bernanke has been getting a lot of good press in recent months for his actions regarding the financial markets implosion. Perhaps he’s just managing expectations with the latest remarks. Investors have been relatively pessimistic with today’s trading, so it’s doubtful his comments will be taken in a positive manner.

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