The worst recession since the 1930s is over, but the recovery is just starting to walk the long, difficult road before it, says Michael Moskow, the former Chicago Fed chief and current Vice Chairman and Senior Fellow at the Chicago Council on Foreign Affairs.

Leading off a slate of high-profile economists and financial thinkers at the second annual Global Financial Leadership Conference this afternoon in Naples, Fla., Moskow said that while the economy is out of the dire financial situation it faced one year ago, troubles in unemployment and consumer spending will continue to weigh on the economy. "Even though real GDP is increasing and the recession probably ended with this most recent quarter, it still is not going to feel good." That's because the national unemployment rate is likely to rise, peaking over 10 percent in the first quarter of 2010 and won't sustainably fall below 7 percent until perhaps 2012 or later. Since consumer spending accounts for the bulk of economic activity, the strides made in stabilizing banks and the economic system this past year will be held back by pressured American shoppers suffering from wage stagnation and weak housing values.

Moskow's opinions are particularly valued because as  the President and CEO of the Chicago Federal Reserve Bank for 13 years until 2007, he has educated insight into what the current team of central bankers are likely fretting over.

Longer term, the professorial Moskow told the gathering of money mangers and policymakers the Fed will have be faced with having to raise rates to stifle inflation. That will most likely come against the wishes of politicians who will want the continued  benefit easy money lends to the economy. Yet the Fed will have to ignore political pressure, Moskow added, since the projected long running fiscal deficits will either cause inflation or cause the expectation of inflation, which becomes a self-fulfilling prophecy.

"They will have to take away the punchbowl right when the party is starting… but I personally believe the Fed will do the right thing," added Moskow. "They will not want to go down in history as the central bank that let inflation get out of control."