Greenspan: Odds Rising for Recession

Former Fed chief says US economy 'close to stall speed'
By Lucas Laursen,  Newser Staff
Posted Dec 14, 2007 9:03 AM CST
In this file photo provided by the International Monetary Fund, Alan Greenspan, former Federal Reserve chairman speaks at the Per Jacobsson Foundation Lecture on Oct. 21, 2007, in Washington. (AP Photo/International...   (Associated Press)
camera-icon View 1 more image

(Newser) – Alan Greenspan warned yesterday that sluggish economic growth is increasing the risk of recession. "It's too soon to say, but the odds are clearly rising," the former Fed chief told NPR. The subprime crisis and its resulting credit turmoil has growth "getting close to stall speed," he said.

"It's like someone who has an immune system that's not working very well is subject to all sorts of diseases," said Greenspan, who defended his Fed decisions this week in a Wall Street Journal essay. His comments follow the Fed's reduction of a key interest rate by a quarter-point, a move criticized by Wall Street as too little, and its move to join other central banks to shore up world markets.