US Federal Reserve chairman Mr Alan Greenspan says the US economy is showing signs of stabilising, but still faces risks ahead.
The cautious tone of his remarks left the door open for the Federal Reserve to lower interest rates again when its policy-setting panel next meets on January 29th-30th.
"There are sound reasons for concluding that the long-run picture remains bright, and even recent signals about the current course of the economy have turned from unremittingly negative through the late fall of last year to a far more mixed set of signals recently," Mr Greenspan said at a conference in San Francisco.
"But I would emphasise that we continue to face significant risks in the near term," Mr Greenspan said.
Mr Greenspan focused on the need for US businesses to get back on their feet as the key for economic revival.
"The broad contours of the present cycle have been, and will continue to be, driven by the evolution of corporate profits and capital investment," he said. He also noted profit margins remain "under pressure."
Mr Greenspan also cited the spending ability of households as a possible source of vulnerability as the economy tries to regain its footing.
The drag from falling stock prices on consumer spending has not yet been fully played out, he said.