Ben Bernanke, chair of the Federal Reserve, testified before Congress today that economic growth is likely to stagnate or contract during next few months, acknowledging for the first time that a recession is possible without actually using the word. "It now appears likely that the real gross domestic product (GDP) will not grow much, if at all, over the first half of 2008," Bernanke said in his opening remarks. "We expect economic activity to strengthen in the second half of the year, in part as the result of stimulative monetary and fiscal policies; and growth is expected to proceed at or a little above its sustainable pace in 2009. However, in light of the recent turbulence in financial markets, the uncertainty attending this forecast is quite high and the risks remain to the downside."
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