Greenspan Warns Higher Inflation May Be in Offing: Fed Chairman ...
Federal Reserve Chairman Alan Greenspan said yesterday there is still no evidence that strong U.S. economic growth is slowing and warned that higher inflation may be on the way.</br></br>"The impressive performance of the American economy continues,Û with several million new jobs added this year and consumer price inflation running below 3 percent,. Greenspan told the congressional Joint Economic Committee.</br></br>But the Fed chairman noted that under the pressure of rapidly rising demand, prices of raw materials and some industrial commodities are increasing, and he expressed concern that manufacturers "may soon attempt to pass on their higher costs"ÛÓtriggering a new wave of inflation,</br></br>Greenspan sidestepped repeated questions about whether the Fed would raise short-term rates againÛÓit already has done so six times this yearÛÓand when the central bank might take such action. The Fed has boosted rates in an effort to slow the economy and thereby curb inflation.</br></br>The Fed chairman seemed to be signaling that further rate increases may lie ahead when he said, ÛÏWe have been especially concerned about the possibility that in the current circumstances, inflation expectations could be particularly prone to adjust upward if actual inflation were to pick up."