"WASHINGTON (Reuters) - Former Federal Reserve Chairman Alan Greenspan said his
successors at the U.S. central bank should act cautiously in lowering interest
rates because of inflation risks, according to an interview published on Sunday.
Greenspan said the Fed should be careful not to cut rates too aggressively
because the risk of an 'inflationary resurgence' is greater now than when he was
chairman, the Financial Times reported."
I wonder if the new Fed governors are wishing that Greenspan would just go away. He does have sound advice though. Any cuts right now could create a deeper crisis when the housing market goes into a slump. The housing market will sink, everything does. The only question is how much of a crisis it is going to be. Keeping interest rates high and giving help to those who can make their payments with assistance, while allowing others to sink is the best plan.
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