Bernanke Sees Housing Drag on Growth

Federal Reserve Board Chairman Ben S. Bernanke says he expects economic conditions to improve in the second half of this year, but that the housing market will continue to be a problem. "Until the housing market -- and particularly house prices -- shows clearer signs of stabilization, growth risk will remain to the downside," the Fed chief told an international monetary conference in Barcelona, Spain. The precipitous decline of residential construction over the past two years should be less of a drag on the economy, he said. In addition, Fed officials expect that the monetary and fiscal stimulus already in the pipeline, along with further progress in the repair of the financial and credit markets, will help the economy. "This baseline forecast is consistent with our recently released projections, which also see growth picking up in 2009," Mr. Bernanke said.