The housing market is unlikely to recover this year, but the economy could rebound as early as next year, said Charles Plosser, the president of the Federal Reserve Bank of Philadelphia.

"I believe the most likely outcome is that economic growth will return toward trend in 2008," Mr. Plosser said in a speech on Saturday, adding that the Fed will not bail out lenders.

"The Fed does not seek to remove volatility from the financial markets," he said.

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