A year after last fall's financial collapse, the country's worst recession since the Great Depression is "very likely over," Federal Reserve Chairman Ben Bernanke said today.
Bernanke, fielding questions after a speech at the Brookings Institution in Washington, D.C., said the recession has probably ended but warned that the economy will still feel weak because of increasing job losses.
"Even though, from a technical perspective, the recession is very likely over at this point," Bernanke said, "it's still going to feel like a very weak economy for some time, as many people still find that their job security and their employment status is not what they wish it was. So that is a challenge for us and all policymakers going forward."
The nation's unemployment rate is at a 26-year high of 9.7 percent. Because unemployment is a lagging indicator, the jobless rate is expected to rise above 10 percent in the coming months.
The Fed chief today also voiced optimism that financial regulatory measures, which have taken a back seat to proposed health care overhaul in recent months, will be passed by Congress.
"My sense is that while maybe the focus on regulatory reform in Congress has not yet been as intense as I expect it will be because of other things that Congress has been concerned with, I feel quite confident that a comprehensive reform will be forthcoming," the Fed chief said. "This has just been too big a calamity and too serious a problem."
Before fielding five questions from the audience this morning, Bernanke had delivered a speech identical to the one he gave Aug. 21 at a Fed summit in Jackson Hole.
Much of his speech was a retrospective summary of the past year, revisiting key events such as the failure of investment bank Lehman Brothers and the near-failure of insurance giant AIG.
While AIG received a record $180 billion in taxpayer bailout funds, Lehman collapsed a year ago today, a failure that Bernanke today called, "unfortunately, unavoidable."
The firm's collapse sent the financial system into disarray but, Bernanke said, thanks to the actions of policymakers around the globe, a more severe crisis had been averted.
"The outcome," he said, "could have been decidedly worse."