Fed plays spin doctor to soothe investors Bankers: Soft landing, oil relief in sight By Dina Temple-Raston USA TODAY

A day after investors drubbed U.S. financial markets, Federal Reserve Chairman Alan Greenspan and other central bankers fanned out across the USA to accentuate the positive.

Greenspan told a monetary policy conference in Washington that productivity gains were keeping inflation at bay. For those worried about rising oil prices, Greenspan said the Fed has an eye out to ensure they don't harm the economy.

''Even though the intensity of oil consumption is markedly below where it was 30 years ago, it still has the potential to alter the forces governing economic growth in the United States,'' he said. ''Policymakers will need to be alert for oil-driven, indeed energy-driven, risks to our expansion.''

The calming words from Greenspan come at a time when bad economic news has been arriving daily. Oil prices have risen 25% since the beginning of August. The consumer price index rose 0.5% in September, its quickest pace in six months, and corporate earnings have been disappointing.

Greenspan's upbeat assessment was echoed by other Fed policymakers. In St. Louis, Fed Gov. Laurence Meyer said the economy was on track for a ''soft landing,'' and relief from high oil prices could be in sight.

A decline in energy costs could then offset rising core inflation coming from consumer demand. ''As a result of this balance of forces, we could still achieve a quite benign outcome, even if it isn't the soft landing that many anticipate,'' Meyer said.

http://www.usatoday.com/usatonline/20001020/2768261s.htm

-- Martin Thompson (mthom1927@aol.com), October 22, 2000

Answers

The fact that Greenspan and all the Federal Reserve Board Govenors find in necessary to be out there, all over the country, assuring people, makes me a bit queasy.

-- QMan (qman@c-zone.net), October 22, 2000.

More economic gibberish. This nation is wonderful. We insure that these poor tired pates don't starve under the freeway.

-- David Williams (DAVIDWILL@prodigy.net), October 22, 2000.