Newspaper article St Louis Post-Dispatch (MO)

Greenspan: Fed's Target Is Taming '95 Inflation

Newspaper article St Louis Post-Dispatch (MO)

Greenspan: Fed's Target Is Taming '95 Inflation

Article excerpt

Federal Reserve Board Chairman Alan Greenspan Wednesday said by the time government economic data show inflation is stirring, taming it can be difficult and costly.

Defending why the Fed has raised interest rates this year, Greenspan made it clear that the moves were aimed more at the central bank's view of the economy next year than this year.

"By the time that aggregate price indexes reveal that inflation is on the upswing, many imbalances that are costly to rectify have already developed," he said.

Greenspan testified before a House Operations subcommittee examining whether the vast economic data-gathering machinery of the federal government produces information that is useful in guiding monetary policy.

Apart from suggesting that the Fed's actions were aimed at intercepting inflation, Greenspan gave no hint whether the bank will take another turn on interest rates when Fed policymakers meet next Tuesday.

He made clear that the Fed was a huge clearinghouse for information, some of which was of questionable accuracy but nonetheless useful. …

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