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.

Peter Fray

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