Greenspan Says Financial Markets Show `Pronounced Turnaround'
June 13 (Bloomberg) -- U.S. financial markets, roiled by the collapse of the subprime-mortgage market, have shown a ``pronounced turnaround'' since March, former Federal Reserve Chairman Alan Greenspan said today.
The worst is over for the credit crisis, or will be soon, and there's now a ``reduced possibility'' of a deep recession, the former Fed chairman said in remarks via satellite to a conference in Mexico City. He added that he has a ``sense'' that tax rebates have helped retailers.
Greenspan's remarks echo the assessment of Fed Chairman Ben S. Bernanke this week, who said that danger of a ``substantial downturn'' in the economy had receded. Economists surveyed by Bloomberg News this month indicated a smaller likelihood of a recession compared with May.
Still, the persistent slump in the housing market is putting ``major downward pressure'' on the economy, said Greenspan, who served as Fed chairman from August 1987 to January 2006.
A government report yesterday showed that retail sales in May rose 1 percent, twice as much as economists had forecast, as consumers spent the federal tax rebates from a fiscal stimulus plan. Consumer spending grew at a 0.9 percent annual pace during the first quarter.
Greenspan said housing remains a ``critical problem'' and financial markets may not recover fully until home prices stabilize, ``perhaps by the end of the year.''
ΒLOOMBERG
No comments:
Post a Comment