Federal Reserve Chairman Alan Greenspan sounded concerned, but not panicky during testimony today (Feb. 13) before the Senate Banking Committee.
Consequently, investment analysts now generally believe the Fed will not lower interest rates until its next regularly scheduled meeting on March 20, according to CNNfn.com.
Greenspan told the committee that the economy might have reached the point around Jan. 1 where it was not growing or shrinking. He said the current lack of consumer confidence is worrisome, but he also expressed confidence that the economy will rebound once dealer inventories of consumer durables, such as RVs, comes into balance with retail demand.
The Fed chairman told the committee he believes the economy will grow at a 2% to 2.5% rate this year, slower than in previous years, but not a recession, which is defined as a six-month period when the economy shrinks.
At least one economist told CNNfn.com that he feels almost certain the Fed will lower interest rates another one half of one percentage point during its meeting in late March.
The Fed lowered interest rates one full percentage point in January with rate cuts on Jan. 3 and Jan. 31.