(Updated to include further detail from Fed Chairman Bernanke's speech.)



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Federal Reserve

Chairman Ben Bernanke reiterated Friday his cautious but rather obvious stance that a global economic rebound appears to be in its early stages, but the road to full recovery will come slowly.

Bernanke, who made his remarks in a speech to economists and technocrats at an annual Fed conference, gave no indications the central bank intended to raise its target interest rate from its current level of between zero and 0.25%.

Using language straight out of the Fed's official statement last week, Bernanke said that economic activity in the U.S. and overseas "appears to be leveling out, and the prospects for a return to growth in the near term appear good."

That single sentence was enough to help lift equities markets across the boar Friday. The Dow Jones Industrial Average and the S&P 500 were up 1.5% and 1.6%, respectively, midway through the session.

But, of course, he immediately qualified his remarks. "Strains persist in many financial markets across the globe, financial institutions face additional losses, and many business and households continue to experience difficulty gaining access to credit," Bernanke said.

"Because of these and other factors, the economic recovery is likely to be relatively slow at first, with unemployment declining only gradually from high levels."

As they do with all statements emanating from the oracular seat of the central bank chairman, investors and traders combed through the speech's transcript, looking for any clues as to whether and when the Fed might begin the process of unwinding the trillion-dollar liquidity programs that it's used to buffer the economy.

The government, of course, must tread a precarious line: Enough stimulus to produce a true recovery on the one hand, and the real risk of severe inflation on the other.

But the speech was largely backward-looking, an attempt to explain (and defend) how and why the federal government made its unprecedented moves amid the "most severe financial crisis since the Great Depression," bailing out the likes of


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In his presentation, titled "Reflections on a Year in Crisis," Bernanke essentially made an extended argument maintaining that the federal government's series of lifelines and liquidity-injection policies and credit-thawing maneuvers -- starting last September, at the outset of the financial crisis -- eventually helped produce what he views as a nascent economic recovery, if a fragile one.

"Overall, the policy actions implemented in recent months have helped stabilize a number of key financial markets, both in the United States and abroad," Bernanke said, citing a litany of examples, from stabilized "short-term funding markets" to rallying stock prices to declining mortgage rates. "Critically, fears of financial collapse have receded substantially," he added, before making his observation about the apparent leveling out of global economic activity.

-- Reported by Scott Eden in New York

Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.