Ben Bernanke said, "With respect to longer-run prospects, my own view is optimistic."
He said that there are two immediate concern for the economy. The first is to ensure that the economy recovers further from the crisis and the ensuing recession. The second, the important part is to ensure that the economy realizes its longer-term potential.
The Fed Chairman acknowledged that it may take time to return to employment levels and and growth rates that the country would expect.
Keeping up with his optimistic tone, said that considering that the depth of the crisis, the global economy has seen significant growth. This growth has been led by emerging-market economies.
One of the points he made was that the recession in 2008 was extraordinarily severe and global in scope. And the most unusual part was that, there was a deep crash in the housing market and an equally deep crisis in financial world at the same time. Proper timing and the combination of the have slowed the natural recovery process.
Pointing the weakness in the housing market, Ben Bernanke said, that the construction of new houses is at less than one-third of that pre-crisis level. Such a slump is not just bad for builders but also for all the companies associated with the home-building business.
The Chairman was clear in his speech that over the medium term the housing sector will stabilize and grow. His simple reason was that the ongoing population growth will fuel the ultimately demand for new house.
Ben Bernanke never left hope out of his speech, towards the end he said, “To the fullest extent, our nation's tax and spending policies should increase incentives to work and to save, encourage investments in the skills of our workforce, stimulate private capital formation, promote research and development, and provide necessary public infrastructure."
At the end Bernanke even took a shot at the congress and the senate. He was clear that the policy-makers cannot use the decision making process to disrupt the confidence of the economy, as it will affect the markets negatively and in the process the entire economy.
The Chairman of the Federal Reserve said, “similar events in the future could, over time, seriously jeopardise the willingness of investors around the world to hold US financial assets or to make direct investments in job-creating US businesses." This was a grim reminder to the US lawmakers, that in trying to score political points inadvertently they can lead the country to stone-age.