Greenspan Worries about Slow US Economic Growth

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Last updated at: (Beijing Time) Thursday, May 22, 2003

Greenspan Worries about Slow US Economic Growth

United States Federal Reserve (Fed) Chairman Alan Greenspan said Wednesday that the US economy "continues to be buffeted by strong cross currents."

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United States Federal Reserve (Fed) Chairman Alan Greenspan said Wednesday that the US economy "continues to be buffeted by strong cross currents."

In a testimony before the US congressional Joint Economic Committee, Greenspan expressed his worries that the US economy wasstill sending mixed signals, with some hopeful signs of stronger growth balanced against more disappointing results following the end of the US-led war against Iraq in the last month.

"We do not yet have sufficient information on economic activityfollowing the end of hostilities to make a firm judgment about thecurrent underlying strength of the real economy," he said.

The Fed chairman continued to signal that the US Fed was prepared to cut interest rates further to spur the sluggish economic recovery if necessary.

Referring to the possibility of deflation in the US economy, which is currently a hot topic among US economists, Greenspan saidthat at the present time, the probability of an unwelcome substantial fall in inflation over the next few quarters exceeds that of a pickup in inflation. However, he believed the probability was minor.

It was a repetition of the words in the statement issued after the closing of the Fed's last policy-making meeting on May 6.

The US Fed expressed its concerns about deflation in the UnitedStates at its meeting in March, seven weeks before it first raisedthe issue to the public.

Some analysts said worries about the weak economic growth and the occurrence of deflation in the country raised the possibility of further cuts of short-term interest rates in the Fed's next policy-making meeting in June.

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