BRUSSELS, Belgium (AP) -- The head of the International Monetary Fund said Thursday that the worst of the global financial turbulence was over, but that the ramifications from it are likely to be felt for some time.
IMF Managing Director Dominique Strauss-Kahn warned that tight global credit conditions may go one even though there are ''good reasons to believe the worst news (is) behind us.''
The changes in consumer behavior triggered by a meltdown in financial markets that began in the U.S. will continue to ripple through economies worldwide, he said, meaning there will be no broad recovery before the end of this year, and possible not until mid-2009.
Speaking to a European Parliament committee, Strauss-Kahn said that the U.S. economy would only pick up once the housing market is stabilized.
The U.S. Federal Reserve, fighting a severe credit crunch and economic weakness, has cut interest rates seven times since last September in an effort to keep the country from toppling into a recession.
''When you look at the housing prices in the U.S. they're still going down, there's not a single sign of stabilization,'' he said. ''Until we see some improvement on the housing market we'll probably have no improvement in the U.S.''
Strauss-Kahn said that emerging economies -- which will account for the bulk of global economic growth this year -- are not immune to the global financial crisis, which started in August.
He also spoke about the danger of rising food prices as investors trade increasingly in commodities as a hedge against other markets.
