Is Ben Bernanke in a state of denial? Despite the almost daily deluge of bleak US economic news, the Fed Chairman insisted yesterday that he was still “not ready to say” that the world’s biggest economy faces recession.

He should get ready to say it. Mr Bernanke’s reluctance to use the “R” word may be understandable, given his need to offer reassurance to markets and consumers, yet almost every serious commentator now accepts that recession is already a reality for America, the only question being how deep and prolonged the condition will prove.

On this issue, the Fed Chairman’s startlingly upbeat prognosis also looks curiously rose-tinted. We can only hope he is vindicated, but Mr Bernanke’s assessment suggests that, whether or not the “R” word applies, the letter that he does think pertains is “V” - the apparent shape he thinks that the US economy is now on track to mimic.

In other words, the Fed’s chief indicated that after its downward slide in the first half of this year, it expects a robust rebound through the autumn and winter, followed by growth at or a little above the long-term average pace in 2009.

While this is not impossible, many will, justifiably, see it as implausible. The reasons are numerous. History suggests that housing slumps on the scale being endured by America have a protracted impact. And there is little sign of the credit crisis dissipating. On the contrary, US unemployment looks set to climb this year, adding to the toll on consumer sentiment and demand. And the boost from tax rebates about to kick in is far smaller than the stimulus put in place to counter the 2001 recession.

Mr Bernanke’s judgment that the worst will soon be over for America looks even more dubious, coming a day after it emerged that the International Monetary Fund (IMF) is about to cut drastically its forecasts for US growth. If leaked drafts are confirmed, the IMF will suggest the US faces a recession almost as severe as that of the early 1990s. The Fed Chairman may be reluctant to utter the “R” word, but it is much too soon for his declaration of “V” for victory to be at all convincing.

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