WASHINGTON - US Federal Reserve Chairman Alan Greenspan on Thursday dismissed concerns the US economy was entering a serious slowdown, giving the go-ahead for further increases in interest rates.
In his first extensive comment on the economy since February, Greenspan warned about a possible housing bubble in some local markets but said the overall economy appeared healthy and would likely remain so.
"Despite some of the risks that I have highlighted, the US economy seems to be on a reasonably firm footing, and underlying inflation remains contained," the Fed chief said in testimony to the congressional Joint Economic Committee.
"Accordingly, the Federal Open Market Committee in its May meeting reaffirmed that it '... believes that policy accommodation can be removed at a pace that is likely to be measured,"' he added, quoting the Fed policy-setting panel.
While some analysts have worried a manufacturing slowdown and periodically weak job growth may be warning signs of a broader weakening in the economy, Greenspan was more upbeat.
"The most recent data support the view that the soft readings on the economy observed in the early spring were not presaging a more-serious slowdown in the pace of activity," he said.
US Treasury prices eased and the dollar strengthened on the closely watched testimony, which analysts said heralded a continuation in the Fed's rate-rise campaign.
Greenspan says US economy firm
AdvertisementAdvertise with NZME.