Greenspan: Discerning U.S. Economic Path 'Especially Difficult'

By John S. McClenahen Even Alan Greenspan, the formidable chairman of the Federal Reserve Board, is having some difficulty discerning what the U.S. economy might be like after a possible war with Iraq. If the geopolitical risks and business uncertainties stemming from the buildup for war diminish in the near term, "our more probable expectation" is a U.S. economy poised for faster growth, Greenspan told a U.S. Senate committee on Feb. 11, However, there is a possibility that the economy will "still be laboring under persisting strains and imbalances that have been misidentified as transitory," he warned. If that's the case, "various initiatives for conventional monetary and fiscal stimulus will doubtless move higher on the policy agenda," Greenspan said. In other words, the Fed will act.

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