Greenspan: Economy In Recession
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Former Federal Reserve Chairman Alan Greenspan said on Tuesday the U.S. economy was in recession, and said it would be appropriate to tap public funds to resolve the mortgage-related crisis that has helped pull the economy under.
In an interview with CNBC television in which he defended his chairmanship of the U.S. central bank against charges that his policy missteps had laid the groundwork for the current crisis, Greenspan said Fed decisions on his watch were rationally constructed based on evidence at the time.
"I have no regrets on any of the Federal Reserve policies that we initiated back then because I think they were very professionally done," Greenspan said.
It is unfair to hold his Fed to task for the housing bubble or the current crisis in credit markets, because global market forces were at work to keep long-term interest rates low, not just Fed policies that brought short-term U.S. interest rates down to multi-decade lows, he said.
"Clearly, certain of our anticipations of what would happen as a consequence of those policies were off but there's no way of avoiding that," he said.
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Reuters | April 8, 2008 08:33 PM