US Fed Chief, Alan Greenspan gave his last speech
to Congress overnight. Highlights include:
The data released over the past
two months or so accord with the view that the earlier soft readings on the
economy were not presaging a more serious slowdown in the pace of
Employment has remained on an upward trend, retail spending has
posted appreciable gains, inventory levels are modest, and business investment
appears to have firmed.
Low long-term interest rates have continued
to provide a lift to housing activity.
The prices of oil and natural
gas have moved up again on balance since May and are likely to place some upward
pressure on consumer prices.
- Slack in labor and product markets has
continued to decline.
- The baseline outlook for the US economy is one of sustained
economic growth and contained inflation pressures. Realising this
outcome will require the Federal Reserve to continue to remove monetary
accommodation. This generally favourable outlook, however, is attended
by some significant uncertainties that warrant careful scrutiny.
The full story, including a summary of the
“significant uncertainties” is in Henry’s Blog today.