Reuters: Economy on fairly firm ground - Greenspan [View All]

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http://news.yahoo.com/news?tmpl=story&u=/nm/20050609/bs_nm/economy_greenspan_dc_4



WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan said on Thursday that with the U.S. economy on a "reasonably firm footing" and underlying prices tame, policy-makers should be able to raise interest rates at a measured pace.

"Despite some of the risks that I have highlighted, the U.S. economy seems to be on a reasonably firm footing, and underlying inflation remains contained," Greenspan said in testimony prepared for delivery 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.

The Fed chief noted that slower productivity growth was pushing up U.S. labor costs and said it was an "open question" whether the rise would feed into inflation or hit corporate profits.