The Chairman Speaks

Alan GreenspanBelow are selected comments from Federal Reserve Chairman Alan Greenspan and following Federal Reserve action since the wave of interest rate reductions began in 2001.

Special Reports: Federal Reserve | U.S. Economy

2005    
Line   December 13FEDERAL OPEN MARKET COMMITTEE:
The Federal Open Market Committee decides to raise its target for the federal funds rate to 4.25 percent.

November 3GREENSPAN:
Federal Reserve Chairman Alan Greenspan says that the U.S. economy is in generally good health but will suffer in coming years unless Congress slows the growth of federal budget deficits. (Hearing of Congress's Joint Economic Committee)

November 1FEDERAL OPEN MARKET COMMITTEE:
The Federal Open Market Committee decides to raise its target for the federal funds rate to 4.00 percent.

September 27GREENSPAN:
Federal Reserve Chairman Alan Greenspan says the U.S. economy has absorbed recent sharp increases in energy prices with little trouble because it has become more dynamic, competitive and open to global trade over the past quarter-century. (Annual meeting of the National Association for Business Economics)

September 20FEDERAL OPEN MARKET COMMITTEE:
The Federal Open Market Committee decides to raise its target for the federal funds rate to 3.75 percent.

August 27GREENSPAN:
Federal Reserve Chairman Alan Greenspan warns that the Fed will face "as many uncertainties over the next 18 years as it has over the past 18." (Economic Conference in Jackson Hole, Wyo.)

August 9FEDERAL OPEN MARKET COMMITTEE:
The Federal Open Market Committee decides to raise its target for the federal funds rate to 3.50 percent.

July 20GREENSPAN:
Federal Reserve Chairman Alan Greenspan cautioned that certain types of increasingly popular, risky home mortgages could be "disastrous" for some borrowers betting on ever-rising house prices. (House Financial Services Committee)

June 30FEDERAL OPEN MARKET COMMITTEE:
The Federal Open Market Committee decides to raise its target for the federal funds rate to 3.25 percent.

June 6GREENSPAN:
Federal Reserve Chairman Alan Greenspan said that recent efforts to restrict international trade and hinder free markets represent a "truly worrisome" threat to global prosperity. (Beijing Banking Conference)

May 3FEDERAL OPEN MARKET COMMITTEE:
The Federal Open Market Committee decides to raise its target for the federal funds rate to 3.00 percent.

April 21GREENSPAN:
Federal Reserve Chairman Alan Greenspan said, for the first time explicitly, that he expects tax increases to be part of any eventual agreement to reduce the federal budget deficit. (Capitol Hill Testimony)

March 22FEDERAL OPEN MARKET COMMITTEE:
The Federal Open Market Committee decides to raise its target for the federal funds rate to 2.75 percent.

Feb. 17GREENSPAN:
Federal Reserve Chairman Alan Greenspan expresses confidence about the health of the U.S. economy while admitting puzzlement about some of its current features. (Capitol Hill Testimony)

Feb. 2FEDERAL OPEN MARKET COMMITTEE:
The Federal Open Market Committee decides to raise its target for the federal funds rate to 2.5 percent.

2003    
Line   Dec. 14FEDERAL OPEN MARKET COMMITTEE:
The Federal Open Market Committee decides to raise its target for the federal funds rate to 2.25 percent.

Nov. 19GREENSPAN: Federal Reserve Chairman Alan Greenspan urged the federal government to reduce its budget deficit and to encourage greater personal saving, warning that foreign investors will not finance endless growth in America's huge trade gap. (Speaking at a banking conference in Germany)

Nov. 10FEDERAL OPEN MARKET COMMITTEE:
A key short-term interest rate is raised to 2.00 percent.

Oct. 15GREENSPAN: Federal Reserve Chairman Alan Greenspan said that higher oil prices have had a "noticeable" effect on the U.S. economy this year but are not likely to cause serious damage unless they move significantly higher. (Remarks to the National Italian American Foundation)

Sept. 21FEDERAL OPEN MARKET COMMITTEE: A key short-term interest rate is raised to 1.75 percent.

Sept. 8GREENSPAN: Federal Reserve Chairman Alan Greenspan says U.S. economic growth picked up in recent weeks but is still restrained by high oil prices. (Appearance before the House Budget Committee)

August 10FEDERAL OPEN MARKET COMMITTEE: The Federal Reserve raises a key short-term interest rate to 1.50 percent.

July 20GREENSPAN: Federal Reserve Chairman Alan Greenspan says the U.S. economy is "going through a soft patch," but that it won't hold back a "broadening" economic expansion that has gained momentum this year. (Appearance before the Senate Banking Committee)

June 30FEDERAL OPEN MARKET COMMITTEE: The Federal Reserve raises a key short-term interest rate to 1.25 percent.

June 15GREENSPAN: Federal Reserve Chairman Alan Greenspan plays down inflation concerns after a government report showed consumer prices rose in May at the fastest monthly rate in more than three years. (Appearance before the Senate Banking, Housing and Urban Affairs Committee)

May 4FEDERAL OPEN MARKET COMMITTEE: The Federal Reserve keeps a key short-term interest rate at 1 percent, a 46-year low.

April 20GREENSPAN: Federal Reserve Chairman Alan Greenspan says the U.S. economy has "picked up" noticeably in recent weeks and that businesses are regaining their ability to raise prices. (Appearance before the Senate Banking Committee)

March 16FEDERAL OPEN MARKET COMMITTEE: The Federal Open Market Committee decides to keep its target for the federal funds rate at 1 percent.

Feb. 11GREENSPAN: Federal Reserve Chairman Alan Greenspan says the economy has turned the corner and is now expanding strongly, which should fuel a pickup in hiring "before long." (Appearance before the House Financial Services Committee)

Jan. 28FEDERAL OPEN MARKET COMMITTEE: Federal Reserve officials leave a key short-term interest rate unchanged, but financial markets swooned after the central bank used slightly different language to signal it will continue to keep rates very low for a while.

Jan. 13GREENSPAN: Federal Reserve Chairman Alan Greenspan says that the global financial markets are able to handle the fallout from the slide in the value of the dollar over the past year. (Speech in Berlin)

2003    
Line   Dec. 9FEDERAL OPEN MARKET COMMITTEE: The Committee perceives that "with inflation quite low and resource use slack," very low interest rates "can be maintained for a considerable period."

Nov. 6GREENSPAN: "The current debate appears to be about how much to cut taxes or how much to increase spending. No significant constituency seems to support taking the actions that will be necessary to move toward, and one hopes achieve, budget balance." (Speech to the Securities Industry Association)

Aug. 12FEDERAL RESERVE ACTION: Officials decide to keep their target for overnight interest rates at 1 percent and say they expect to keep it there "for a considerable period."

July 15GREENSPAN: "With the target funds rate at 1 percent, substantial further conventional easings could be implemented if the FOMC judged such policy actions warranted." (House Financial Services Committee)

June 25FEDERAL RESERVE ACTION: Officials cut their target for overnight interest rates by a quarter of a percentage point, to 1 percent.

May 21GREENSPAN: "Deflation, a decline in the overall level of prices, is "a very serious issue and an issue which we at the Federal Reserve are paying extensive attention [to]." (Congressional Joint Economic Committee)

May 6FEDERAL RESERVE ACTION Policymakers make no change in their very low target for overnight interest rates.

April 30GREENSPAN: "I continue to believe the economy is positioned to expand at a noticeably better pace than it has during the past year, though the timing and the extent of that improvement remains uncertain. Fundamentally, the long-run growth potential of the economy remains solid." "Going forward, some further unwinding of the economic tensions that have been associated with the situation in Iraq seems likely. As that occurs, the fundamental trends shaping the economic outlook should emerge more clearly." (House Financial Services Committee)

March 18FEDERAL RESERVE ACTION: Officials leave their target for overnight interest rates unchanged but signaled clearly that they stand ready to act if the looming conflict in Iraq destabilizes world financial markets.

Feb. 11GREENSPAN: "I am one of the few people who still are not as yet convinced that stimulus is a desirable policy at this particular point."(Senate Banking Committee)

Jan. 19FEDERAL RESERVE ACTION: Officials announce no change in their extremely low target for overnight interest rates, despite strong indications that U.S. economic growth completely stalled in the final three months of 2002.

2002    
Line   Dec. 19GREENSPAN: "The limited evidence since the November easing has supported our view that the U.S. economy has been working its way through a soft patch. And the patch has certainly been soft." (New York Economic Club)

Dec. 10FEDERAL RESERVE ACTION: Officials, expecting economic growth to accelerate again in a few months, leave their key 1.25 percent target for overnight interest rates unchanged at a policymaking meeting.

Nov. 20GREENSPAN: "Despite the draining impact of a loss of $8 trillion of stock market wealth, a sharp contraction in capital investment and, of course, the tragic events of September 11, 2001, our economy is still growing. Importantly, despite significant losses, no major U.S. financial institution has been driven to default." (Council on Foreign Relations)

Nov. 13GREENSPAN: "I know there's a presumption that if you make those tax cuts permanent it will add stimulus to the economy. I doubt it." "I think only that the market's already presumed that they are permanent and that the only thing that probably could have a negative effect later on is that when the markets find out they may be wrong. But that's not a short-term issue." (Congressional Joint Economic Committee)

Nov. 6FEDERAL RESERVE ACTION: Officials cut the Fed's target for overnight interest rates by a half-percentage point to 1.25 percent.

Sept. 24FEDERAL RESERVE ACTION: Officials leave their target for overnight interest rates unchanged at a policymaking meeting, saying they expect a pickup in economic growth.

Aug. 30GREENSPAN: "As events evolved, we recognized that it was very difficult to definitively identify a bubble until after the fact -- that is, when its bursting confirmed its existence." (Kansas City Federal Reserve Bank's annual economic conference)

Aug. 13FEDERAL RESERVE ACTION: Policymakers acknowledge that economic growth slowed but make no change in short-term interest rates.

July 17GREENSPAN: "The trouble, unfortunately, is that the shock of what has happened will keep malfeasance down for a while. But human nature being what it is -- and memories fade -- it will be back. And it is important that at that time appropriate legislation be in place to inhibit activities that we would perceive to be inappropriate." (House Financial Services Committee)

April 17GREENSPAN: "Prospects for low inflation and inflation expectations in the period ahead mean that the Federal Reserve should have ample opportunity to adjust policy to keep inflation pressures contained once sustained, solid, economic expansion is in view." (Congress's Joint Economic Committee)

March 7GREENSPAN: "We have seen encouraging signs in recent days that underlying trends in final demand are strengthening," Greenspan said. But, he added, "the dimensions of the pickup [in consumer and business spending] remain uncertain." (Senate Banking Committee)

Feb. 27GREENSPAN: "Despite the disruptions engendered by the terrorist attacks of September 11, the typical dynamics of the business cycle have reemerged and are prompting a firming in economic activity." (House Financial Services Committee)

Jan. 24GREENSPAN: "There have been signs recently that some of the forces that have been restraining the economy over the past year are starting to diminish and that activity is beginning to firm." (Senate Budget Committee)

Jan. 11GREENSPAN: "There are sound reasons for concluding that the long-run picture remains bright, and even recent signals about the current course of the economy have turned from unremittingly negative through the late fall of last year to a far more mixed set of signals recently." (San Francisco speech)

2002    
Line   Dec. 11FEDERAL RESERVE ACTION: Acting for the 11th time in 2001 to counter the nation's deepening recession, policymakers reduce their target for overnight interest rates by a quarter-percentage point to 1.75 percent.

Nov. 6FEDERAL RESERVE ACTION: Officials, clearly worried that the U.S. economy may be spiraling downward into recession in the wake of the Sept. 11 terrorist attacks, once again reduce their target for overnight interest rates by a half-percentage point to 2.00 percent.

Oct. 17GREENSPAN: "We have to be cautious in looking at whatever we do to make sure that the stimulus we do create is net, on balance, a stimulus." "I think what's crucially important in this discussion is to make the judgment first." "Are you embarking on a tax policy whose purpose is to basically move production from the future to the present, or are you trying to increase the overall rate of growth of the economy over the long run? What you do in both of those different scenarios is really remarkably different." (Joint Economic Committee)

< Oct. 2FEDERAL RESERVE ACTION: Policymakers cut their target for overnight interest rates another half-percentage point to 2.5 percent.

Sept. 20GREENSPAN: "While there is an obviously, very strongly desired sense to move rapidly, it's far more important to be right than quick" (Senate Banking Committee)

Sept. 17FEDERAL RESERVE ACTION:Officials cut their target for overnight interest rates to 3.0 percent.

Aug. 31GREENSPAN: "There can be little doubt that sizable swings in the market values of business and household assets have created important challenges for policymakers." (Kansas City Federal Reserve Bank Conference)

Aug. 21FEDERAL RESERVE ACTION: Officials, concerned about the uncertain outlook for the U.S. economy amid a global slowdown in growth, lower their target for short-term interest rates to 3.5 percent.

July 18GREENSPAN: "Certainly, should conditions warrant, we may need to ease further." (House Financial Services Committee)

June 27FEDERAL RESERVE ACTION: Officials reduce their target for short-term interest rates by a quarter of a percentage point to 3.75 percent.

May 24GREENSPAN: "We are not free of the risk that economic weakness will be greater than currently anticipated, requiring further policy response." "But we also need to be aware that our front-loaded policy actions this year should be providing substantial support for a strengthening of economic activity later this year." (Speech to the Economic Club of New York)

May 15FEDERAL RESERVE ACTION: Officials reduce their target for short-term interest rates by another half-percentage point to 4.0 percent.

April 18FEDERAL RESERVE ACTION: The Federal Reserve aggressively cut its target for a key short-term interest rate by half a percentage point to 4.5 percent.

April 4GREENSPAN: "To most economists, the evidence is impressively persuasive that the dramatic increase in world competition, a consequence of broadening trade flows, has fostered markedly higher standards of living for almost all countries." (Senate Finance Committee)

March 20FEDERAL RESERVE ACTION: The Federal Reserve cuts its target for overnight interest rates by half a percentage point to 5.0 percent.

Feb 13GREENSPAN: "When consumers become less secure in their jobs and finances, they retrench." "This unpredictable rending of confidence is one reason that recessions are so difficult to forecast." "Although consumer confidence has fallen, at least for now it remains at a level that in the past was consistent with economic growth." (Senate Banking Committee)

Jan. 31FEDERAL RESERVE ACTION:The Federal Reserve cuts short-term interest rates by half a percentage point to 5.5 percent.

Jan. 25GREENSPAN: "The crucial issue is whether that marked decline [in production] breaches consumer confidence. . . . To date, it has not." (Senate Budget Committee)

Jan. 3FEDERAL RESERVE ACTION: The Federal Reserve cuts short-term interest rates by half a percentage point to 6 percent.

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