Greenspan sees encouraging signs economy beginning to stabilize
Thursday, January 24th 2002, 12:00 am
By: News On 6
WASHINGTON (AP) _ Federal Reserve Chairman Alan Greenspan told Congress Thursday that he saw a number of encouraging signs that the country's first recession in a decade could soon be over.
``There have been signs recently that some of the forces that have been restraining the economy over the past year are starting to diminish and that activity is beginning to firm,'' Greenspan said in prepared remarks.
Many economists have been forecasting that the Fed will decide not to cut interest rates when policy-makers next meet on Jan. 29-30. These analysts believe that the Fed has already done enough to spur a rebound from the current recession.
In his appearance before the Senate Budget Committee, Greenspan also sought to defend his policy switch of a year ago, when he came out in favor of large tax cuts given the prospect at the time of a 10-year budget surplus in excess of $5 trillion.
Greenspan noted that the Congressional Budget Office on Wednesday trimmed its surplus estimate by $4 trillion. But he said the prospect of $1.6 trillion in surpluses over the next decade still represented a budget picture that was ``considerably stronger'' than a decade ago.
In his remarks on the economy, Greenspan sounded decidedly more upbeat than he had just 13 days ago when he warned in a San Francisco speech that the economy still faced ``significant risks.''