Federal Reserve Chairman Alan Greenspan suggested during testimony before a congressional committee today (April 17) that he is in no hurry to raise interest rates.
Greenspan said the economy is improving, but he remains uncertain about how strong the recovery will be, according to CNNFN.COM.
The next Fed meeting will be on May 7, but, prior to today, most financial markets analysts assumed that the Fed would not raise interest rates until its June meeting, at the earliest. After hearing Greenspan’s remarks today, many analysts now believe interest rate increases are unlikely until the Fed’s August meeting, at the earliest.
The Fed has a history of raising interest rates when it becomes worried that the rate of inflation is accelerating. But Greenspan told Congress today that inflation remains low and there are no immediate signs that it will get worse.
Meanwhile, the Fed lowered interest rates 11 times during 2001 first, in an effort to prevent a recession, and, later, to keep the recession from getting worse.
Greenspan told Congress today that rising consumer debt and higher energy prices could slow economic growth, suggesting that he believes an interest increase in the next few weeks could slow the recovery.