Fed's Goal Is to Cut Inflation to Zero, Greenspan Says
WASHINGTON -- Federal Reserve Board Chairman Alan Greenspan said the central bank's goal is to reduce inflation to "a number approximating zero" over the next "several years."</br></br>In written responses to questions from the Senate Banking Committee, Mr. Greenspan said he wants to reduce inflation "to a level at which it no longer has economic significance." He added: "I'm not sure what, in terms of our conventional price indexes, that translates into quantitatively, but I think we must at this point take as our working assumption that it is a number approximating zero."</br></br>Mr. Greenspan said the Fed should aim to achieve that goal "within the next several years."</br></br>The Fed chairman's comments come at a time of increasing uncertainty about monetary policy. Inflation appears to be accelerating, but at the same time, worries are growing that high interest rates might push the economy into recession.</br></br>The Fed's policy committee is to meet today to review its credit stance and isn't expected to make changes until it has further evidence of the economy's direction.