Preview: What Greenspan's Expected To Tell Congress

ByJohn S. McClenahen When Federal Reserve Board Chairman Alan Greenspan testifies before Congress on Nov. 13, he'll have a "podium to resume his cheerleading for the U.S. economy," says Maury Harris, chief U.S. economist for UBS Warburg LLC, New York. It will be Greenspan's first testimony since the Federal Open Market Committee, the Fed's policy-making arm, cut the short-term U.S. interest rates by 50 basis points to 1.25% on Nov. 6. Harris expects Greenspan to emphasize productivity and the need for businesses to invest to keep the remarkable recent record of U.S. productivity increases going. "The chairman also will likely stress that the economy should re-accelerate when the uncertainty over an invasion of Iraq evaporates," says Harris. However, this week's major U.S. economic reports won't be nearly as positive as Greenspan is expected to be, Harris suggests. He anticipates that the U.S. Commerce Department's report on October retail sales, due out Nov. 14, will show a second consecutive monthly decline. And on Nov. 15, Harris believes, Federal Reserve data will show that U.S. industrial production fell again in October.