Greenspan says expect moderate growth

Greenspan says expect moderate growth

By Mark Felsenthal Mon Jul 18, 3:53 PM ET

WASHINGTON (Reuters) - Although soaring oil prices have hampered U.S. economic growth, the economy is coping well and is set to expand at a moderate pace,

Federal Reserve Chairman Alan Greenspan said in remarks released on Monday.

Greenspan said Fed research found that the rise in oil prices since 2003 to above $60 a barrel is likely to shave about three-quarters of a percentage point from the U.S. gross domestic product this year. Rising energy costs sapped growth by a half-percentage point in 2004, he said in written responses to questions from Congressional Joint Economic Committee Chairman Jim Saxton, a New Jersey Republican.

'Aside from these 'headwinds' the U.S. economy seems to be coping pretty well with the run-up in crude oil prices,' the Fed chairman said in a letter dated July 11.

Treasury debt prices dipped on what traders viewed as an optimistic tone in Greenspan's letter, suggesting the Fed may continue its campaign of raising short-term interest rates for some time before taking a break.

'In essence the bond market could treat this as a preview of his testimony starting on Wednesday

<laughing>

Still living up to your chosen name, I see.

Is this the same Greenspan who stated he was worried the Clinton administration was paying down the federal debt too fast?

Miles 'Bait & Switch' Long

Greenspan also said Bush's tax cuts wouldn't cause deficits.

It's also the same Greenspan who said Bush's tax cuts wouldn't result in deficits.

According to the CBO, 2/3rds of Bush's deficit is directly attributed to Bush's tax cuts.

Greenspan can't leave the Fed soon enough.