Bernanke says some markets have eased

WASHINGTON, Feb. 25 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke repeated Wednesday his assertion the economy would start to rebuild in 2010.

Bernanke told members of the House Financial Services Committee some financial markets have improved in the past four months, particularly the short-term funding markets, which form the basis for lending to households and businesses.

Since November, he said, the conforming fixed mortgage rate has fallen nearly 1 percent.

"Strains in short-term funding markets have eased notably since the fall," he said, noting "London interbank offered rates … have decreased sharply."

Corporate risk spreads have also "declined somewhat from extraordinarily high levels, although these spreads remain elevated by historical standards," he said.

Still frozen, however, is the securitization market for bundled financial products other than conforming mortgages, Bernanke said.

As he told a Senate Committee Tuesday, Bernanke repeated his claim 2010 would be a "year of recovery," as long as federal interventions were met with success.

"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," Bernanke said.