Part 1
Greenspan Blasts US Businesses, Cites 'Infectious Greed'
Federal Reserve Chairman Alan Greenspan on Tuesday issued a rare condemnation
of U.S. businesses, saying they were gripped by an "infectious greed" in the
late 1990s for which the country is now paying a steep price. But he suggested
the Fed sees no need to give the economy a new dose of stimulus.
Delivering a semiannual report on monetary policy to Congress, Greenspan
sought to reassure investors and consumers about the inherent strength of the
U.S. economy, which he said is growing faster than the Fed expected just six
months ago. He said the central bank expects the economy to grow 3.5% to 3.75%
this year, and up to 4% next year.
Fed Forecasts US '03 Jobless Rate In 5.25% To 5.5% Range
The Federal Reserve Board on Tuesday raised its expectations of U.S.
economic growth this year, saying it expects the combination of monetary and
fiscal policy to boost demand in coming quarters.
The unemployment rate is expected to fall over the next year, the Fed said.
The unemployment rate will average 5.25% to 5.5% in the fourth quarter of 2003,
down from an estimated 5.75% to 6% in the fourth quarter of 2002, the Fed said.
The central bank said the "central tendency" of its top policymakers calls
for the U.S. gross domestic product to expand by 3.50% to 3.75% between the
fourth quarter of 2001 and the fourth quarter of 2002. That marks a substantial
increase from the Fed's forecast of 2.50% to 3.0% in February.
Treasurys Mixed Amid Equities, Data And Greenspan
U.S. Treasury prices were mixed in midmorning trading Tuesday, amid weakness
in equities, a surge in manufacturing activity for June and optimistic comments
upon the economy by Federal Reserve Chairman Alan Greenspan.
At 10:15 a.m. EDT (1415 GMT), the benchmark 10-year note was at 101 31/32, up
1/32 to yield 4.62%. The 30-year bond was at 99 22/32, down 7/32 to yield
5.40%.
Greenspan: Senate Corp Governance Bill Is 'To The Point'
Federal Reserve Chairman Alan Greenspan on Tuesday expressed his support for
the bill the Senate approved late Monday cracking down on corporate accounting
fraud.
"In general, I find the elements within the bill that you just passed strike
me as really to the point as to what needs to be addressed," Greenspan said,
answering questions from the Senate Banking Committee after delivering his
semiannual report on the economy.
Greenspan Says Laws On Stock Options Aren't Needed
Federal Reserve Chairman Alan Greenspan said Tuesday that Congress doesn't
need to enact laws to require corporations to account for stock-options as
expenses because that is happening anyway.
Testifying before the Senate Banking Committee, Greenspan said he expects the
Financial Accounting Standards Board to rule appropriately on the matter. But
recent announcements by the Coca-Cola Co. and the Washington Post Co. show that
U.S. companies are moving in that direction on their own, he said.
Greenspan Makes Unusual Bid To Stem Dollar Negativity
In a move that struck currency strategists as unusual, Federal Reserve Board Chairman Alan Greenspan sounded a cautionary note Tuesday about forecasts the dollar may continue to weaken in his semiannual testimony to Congress Tuesday.
In referring to "a consensus in foreign exchange markets that the dollar is in the midst of a secular decline," Greenspan "wants to add a note of caution and he is trying to calm markets and quell sharp adjustments" in the dollar's
exchange rate, said Michael Woolfolk, currency strategist with the Bank of New York.
=US Stocks Mixed; Techs, Greenspan Pushing Oversold Rally
Here we go again. After dropping sharply earlier in the session, the U.S.
equities markets are trying to gain some footing Tuesday, with the Nasdaq
Composite Index in positive territory and the Dow Jones Industrial Average
significantly off its lows.
"I think that we're seeing the beginning of an oversold rally," said James
Park, senior vice president of equities trading at Brean Murray. "When you see
industry laggards outperform that's the beginning of a rally in the market but
as in terms of how sustainable it is, that's another story."
=FED WATCH: Greenspan Side Steps The Quick Pick-Me-Up
Many stock investors were looking for a quick pick-me-up from Federal Reserve
Chair Alan Greenspan Tuesday, and based on the reaction of equities markets and
economists, they didn't get it.
But even if Greenspan's prepared testimony before the Senate Banking
Committee failed to provide an instant injection of inspiration and confidence,
most economists agreed markets may have gotten something better: a generally
favorable assessment of the economy.
(END) Dow Jones Newswires 16-07-02 |
