Kohn says end could come later this year, but that central bank will do whatever it takes to boost growth.
Last Updated: April 20, 2009: 10:21 PM ET
NEWARK, Del. (Reuters) -- The deep U.S. economic recession is showing signs of letting up and of ending later this year, a top Federal Reserve official said Monday.
Recent developments "may be an early indication that conditions are falling into place for real GDP to decline at a slower rate in the second quarter and to stabilize later this year," Fed Vice Chairman Donald Kohn said in a speech at the University of Delaware.
Recovery may be gradual, however, Kohn said, and added that the Fed would not hesitate to deploy new weapons to boost growth if the anticipated rebound falls short.
"The risk that inflation could be lower will be exacerbated to the extent that economic activity falls short of the path that I have described," he said. "In these circumstances, the Federal Reserve would continue to look for ways to relieve financial pressures and encourage spending."
The U.S. central bank's policy-setting panel meets next week. At its previous meeting in March, the Fed renewed its pledge to keep interest rates very low for an extended period. It also committed to push an additional $1.15 trillion into the economy by buying longer-term Treasury securities and buying more debt and mortgage-backed securities issued by mortgage finance agencies.
http://money.cnn.com/2009/04/20/news/economy/kohn_delaware.reut/index.htm