WASHINGTON (Reuters) - The U.S. economy may not yet be out of the woods, Federal Reserve Chairman Alan Greenspan said again Tuesday, once again leaving the door open for further interest rate cuts by the central bank.
Greenspan's testimony prepared for delivery to the Senate Banking Committee was the same as that given to the House Financial Services Committee last week.
In the testimony, he noted that economic indicators had turned from "persistently negative to more mixed," a positive development, but warned there were still considerable risks that the U.S. economy may get worse before it gets better.
"The period of sub-par economic performance, however, is not yet over, and we are not free of the risk that economic weakness will be greater than currently anticipated, and require further policy response," Greenspan reiterated.
"That weakness could arise from softer demand abroad as well as from domestic developments," he said. "But we need also to be aware that our front-loaded policy actions this year coupled with the tax cuts under way should be increasingly affecting economic activity as the year progresses."
Greenspan's testimony prepared for delivery to the Senate Banking Committee was the same as that given to the House Financial Services Committee last week.
In the testimony, he noted that economic indicators had turned from "persistently negative to more mixed," a positive development, but warned there were still considerable risks that the U.S. economy may get worse before it gets better.
"The period of sub-par economic performance, however, is not yet over, and we are not free of the risk that economic weakness will be greater than currently anticipated, and require further policy response," Greenspan reiterated.
"That weakness could arise from softer demand abroad as well as from domestic developments," he said. "But we need also to be aware that our front-loaded policy actions this year coupled with the tax cuts under way should be increasingly affecting economic activity as the year progresses."
