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LONDON (MarketWatch) -- Gary Stern, president of the Federal Reserve Bank of Minneapolis, believes the credit crunch will continue for several quarters and could still get worse, according to an interview with the Financial Times newspaper. Stern said that with its core interest rate at 2%, the Fed is well-placed to cope with further weakness in the economy, but is less well-positioned to cope with further increases in inflation, according to the newspaper. He added that headwinds to the economy haven't diminished and are possible getting worse, setting the stage for a lengthy period of weakness like that seen in the early 1990s, the report added.