Economist: Recession fears unfounded

Following the Federal Reserve’s rescue of The Bear Stearns Cos. Inc. of New York, the economy will probably avoid going into recession, said Marci Rossell, a former chief economist for CNBC Inc. television. She credited the Fed chairman with orchestrating the $30 billion bailout of Bear Stearns, which reduced credit swap rates, cut the London Interbank Bid Rate and helped stabilize the financial markets. Noting that the gross domestic product grew at a 0.6% clip in the first quarter, Ms. Rossell said the economy is in a "slowdown" rather than a recession. She was speaking at the Greenwood, Village, Colo.-based Investment Management Consultants Association's 2008 Spring Development conference in New Orleans. "The economy will probably dodge a recession," said Ms. Rossell, who has also worked as a corporate economist for OppenheimerFunds Inc. of New York and the Federal Reserve Bank of Dallas. "If we have a recession in this country, it will be the shortest and the shallowest [that we have ever seen]." The Federal Reserve has handled the financial crisis very well, Ms. Rossell said, crediting Federal Reserve Board Chairman Ben S. Bernanke with using Fed policy to keep the economy out of a financial crisis. CNBC is located in Englewood Cliffs, N.J.