FOR IMMEDIATE RELEASE
July 15, 2003
Contact:  Marie DesOrmeaux
(202) 225-3772
 
Ross Responds to Greenspan's Semiannual Report 
As Member of Financial Services Committee
 
(Washington, D.C.) Fourth District Rep. Mike Ross (AR-4) today was among members of the Financial Services Committee who received Federal Reserve Chairman Alan Greenspan’s semiannual monetary policy report in a special hearing, and made the following statement regarding the report: 

“I found Chairman Greenspan’s testimony this morning comforting, yet troubling at the same time.  He indicated that the Federal Reserve is ready to cut interest rates yet again if another economic boost is needed.  While the current historically low interest rates allow working families to afford better housing, students to get the financial help they need, or small business owners to expand their operation – all factors which help to stimulate the economy, continued cuts to interest rates signals a dangerous situation.

“As the chairman noted, ‘a very low inflation rate increases the risk that an adverse shock to the economy would be more difficult to counter effectively.’  Recent interest rate cuts have been enacted as economic stimulus to recession, however our nation now faces the threat of deflation, which could mean very slow economic growth, flat or falling wages, and high unemployment.  While Chairman Greenspan indicated that the threat of deflation is remote, we are running out of room as far as rate cuts.  At 1 percent, the federal funds rate is near the end of its effectiveness as a way to stimulate the economy; we are nearing the end of our rope.”


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