US recovery on the horizon

In a small ray of light for the global economy, but the US Federal Reserve says the domestic economy could start to recover in 2010.

In a Monetary Policy report delivered before Congress yesterday, Federal Reserve Chairman Ben Bernanke expressed anticipation that recent policy actions would go some way to stimulate an economic recovery in 2010.

"If actions taken by the administration, the Congress and the Federal Reserve are successful in restoring some measure of financial stability – and only if that is the case, in my view – there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery," he said.

The outlook for the economy however remained uncertain, Mr Bernanke said, with downside risks to the economy “probably” outweighing those on the upside.

Indeed consumers remain concerned about the outlook for the economy; a key measure of consumer confidence reached an historic low this month, the American Conference Board reported overnight.