Greenspan to explain view on US recovery

US Federal Reserve Chairman Mr Alan Greenspan is set to outline later today how he sees the US economic recovery evolving as …

US Federal Reserve Chairman Mr Alan Greenspan is set to outline later today how he sees the US economic recovery evolving as global markets wait with bated breath for fresh hints of encouragement.

The world's most influential central banker was scheduled to unveil his biannual analysis of the economy's condition before the House Financial Services Committee at 3 p.m. Irish time and to take questions afterward.

His testimony comes against a backdrop of mostly positive recent economic indicators that, on balance, augur well for the future. Numbers out early this year prompted him to advance a cautiously optimistic view on January 24th, when he said the economy was at this point turning, "as best I can judge."

Analysts think the data that have trickled out since will strengthen the optimistic tone further, although the Fed chairman is likely to hold to his habitual caution.

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The issue for economists and investors is how much more strongly Mr Greenspan might present the case for a recovery and whether he will deliver any hints about when the Fed might look at unwinding some of 2001's 11 interest rate cuts - although such tightening is still seen many months in the future.

The United States slipped into recession last March, according to the National Bureau of Economic Research, which dates business cycles. Any suggestion from Mr Greenspan that he considered the recession over would be a powerful stimulant for global investors.

But there also are issues looming for the economy that, while not directly influencing activity, are a force in determining its future. Lawmakers were certain to raise the issue of Enronitis - uncertainty stemming from concern about accounting deficiencies in the case of bankrupt energy supplier Enron.

Yesterday the Conference Board in New York said its consumer confidence index fell to 94.1, its lowest level since last November, after two months of gains. The lower reading implies a slower pace of recovery.

"You can't look at these numbers and say things are going to be booming going forward," said economist Mr Kevin Logan of Dresdner Kleinwort Wasserstein in New York.