Bernanke has higher hopes for economy in 2011

Federal Reserve Chairman Ben Bernanke is optimistic about the economy in 2011, but believes unemployment and housing will remain issues.

"We see the economy strengthening," he said, speaking at an event hosted Thursday by the Federal Deposit Insurance Corporation. "My sense is that we are at a position where we’re starting to get some improvement."

Bernanke anticipates the economy will grow three to four percent in 2011. However, he noted that while growth is good, that rate will not be enough to reduce unemployment "significantly."

While the economy has seen several positive economic signs in recent months, Fed officials have said the housing market continues to struggle, and is serving as a drag on the overall economic recovery.

Issues in that market served as the catalyst for the economic downturn, and Bernanke said that until the housing finance system is revamped, it will struggle to recover. Both the administration and Congressional lawmakers, particularly Republicans, have targeted an overhaul of Fannie Mae and Freddie Mac as a top priority in 2011.

"Fannie and Freddie reforms...will be critical to reestablishing the residential mortgage market," Bernanke said.