The worst of the credit crisis is behind us, says David Malpass, chief economist for Bear Stearns.

That sentiment echoes a lot of talk in Washington these days, but Malpass takes it a step farther — he sees a big return to growth in the latter half of the year.

His forecast calls for gross domestic product (GDP) growth of 3 percent in the last six months of 2008. Unemployment and inflation should hold steady.

"The powerful Washington stimulus, combined with huge reservoirs of liquidity built earlier in the decade, should spur a rebound in credit markets, equity markets and gradually in economic activity," Malpass told clients in a conference call.

Aggressive Federal Reserve action to provide liquidity combined with interest rate cuts have helped to stabilize credit markets, he says.

"With the March crisis winding down,” Malpass notes, "credit spreads are narrowing.” This indicates that investors see less risk in the months ahead.

"The growth outlook should improve, creating an investment climate somewhat similar to 2003,” Malpass predicts. Stock markets were up more than 25 percent that year.

As in 2003 and 2004, Malpass thinks that emerging markets, Japan and durable goods should benefit from plentiful liquidity conditions.

"Global fundamentals are reasonably solid in terms of interest rates, innovation, and profit opportunities, arguing for a recovery in coming months,” Malpass recently wrote.

"Looking forward, we expect to see indicators of recovery in coming months — narrowing credit spreads, a moderate decline in conforming mortgage rates, moderate jobless claims, higher equity prices, revived consumption growth in May and June, and then an increase in home sales and mortgage applications," he forecasts.

"The weak dollar trend has dampened U.S. equity gains and pushed commodity prices higher,” Malpass says.

"If the trend reversed, either by an inflation-fighting Fed, G-7 actions, or presidential election politics, we think it would have a major positive impact on the U.S. growth and equity outlook and reverse the uptrend in commodities,” he says.

Malpass is not alone in arguing that the U.S. dollar may be nearing an end to its decline. Another Wall Street firm, Brown Brothers Harriman, issued a report advising clients to use current dollar weakness to buy dollars and sell yen.