The U.S. economy and mortgage markets will most likely begin to recover by the beginning of next year, according to statements from Federal Reserve Chairman Ben Bernanke Sunday.

“We’ll see the recession coming to an end probably this year,” Bernanke said during an interview with on the CBS “60 Minutes” program. “We’ll see recovery beginning next year.”

He mentioned that the key to an economic bounce back will be revamping the financial markets.

“Until we get that stabilized and working normally, we’re not going to see recovery, but we do have a plan. We’re working on it,” he said.

The current year will be one of moderating decline, according to Bernanke, with the downward trends bottoming out before 2010. This means unemployment may continue to rise in 2009 but not by such dramatic figures as in the past several months.

Bernanke has been the Chairman of the Fed since 2006 when he took over the reigns from Alan Greenspan. Bernanke has taken a lot of flack in the past year for the Fed bailout actions on behalf of failing U.S. banksand lenders.

“There were many people who said, ‘Let them fail.’ You know, ‘It’s not a problem, the markets will take care of it.’ And I think I knew better than that,” Bernanke said, claiming that to let them fail would have caused system wide chaos.

And while he sympathizes with the many upset Americans over the bailout last year of insurance company American International Group (AIG), he defended the action as necessary.

“Of all the events and all of the things we’ve done in the last 18 months, the — the single one that makes me the angriest, that gives me the most angst, is the intervention with AIG,” Bernanke said. “Here was a company that made all kinds of unconscionable bets. Then, when those bets went wrong, we had a situation where the failure of that company would have brought down the financial system.”

His interview did end on a positive note though. “I just have every confidence that as we get through this crisis, that our economy will begin to grow again, and it will remain — the most powerful and dynamic economy in the world.”

According to a CNN/Opinion Research Corporation poll conducted before a key vote in the Senate last Thursday, 61 percent of Americans are opposed to any more government bailouts.

“One reason for the opposition to more money being spent may be that more than eight in 10 said that the first $350 billion of taxpayer money for the bailout didn’t work,” said CNN Polling Director Keating Holland. “Only 14% say that the money accomplished what it was supposed to do.”

Yet, the U.S. Senate did approve the release of the remaining half of the Troubled Asset Relief Program  (TARP) bailout funds Thursday by a 52-42 vote.

“Barack Obama may have something to do with the vote,” said Holland. “Democratic leaders in the Senate may not have been eager for a showdown with the president-elect. The public would have been squarely on Obama’s side. Sixty-two percent in the poll say they trust Obama more than Democratic Congressional leaders.”

In fact, the president-elect did make several promises about the way the money would be used, stating, “My pledge is to change the way this plan is implemented and keep faith with the American taxpayer by placing strict conditions on CEO pay and providing more loans to small businesses.”

His senior economic advisor, Lawrence Summers, also outlined the Obama spending plan in two letters sent to the Senate this week. As much as $100 billion will be used to help individual homeowners stay out of foreclosure, a plan feature many on Capitol Hill had called for from the beginning of the mortgage bailout legislation process. The other funds may be used to finance a Bank of America Corp buyout of Merill Lynch & Co, support other failing lenders and possibly even automakers.

“If the president-elect concludes that a substantial new commitment of funds is necessary to forestall a serious economic dislocation,”Summers said in a letter, “he will certify that decision to Congress before any final action is taken.”