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Greenspan: US Gas Prices May Drop

SINGAPORE--U.S. Federal Reserve Board Chairman Alan Greenspan said Monday he was encouraged by signs that gasoline prices in the United States could be coming down in the months ahead.

"We may ... be seeing a flattening of the retail price of gasoline in the U.S. after sharp rises in the last few years," Greenspan said.

Addressing International Monetary Conference delegates by live video link from Washington, Greenspan also said that inflation is currently "not a significant problem" in the U.S. economy.

Greenspan stressed, however, that the Fed is keeping a close watch for signs of potential inflationary pressures. The Fed has cut interest rates five times this year in an effort to boost the struggling U.S. economy, though government officials have remained watchful for any possible surge in inflation. So far it has been kept in check by U.S. businesses' current inability to pass along higher costs to consumers and by the strong U.S. dollar, Greenspan said.

Meanwhile, energy prices seem to be stabilizing, Greenspan said. "Overall energy prices have declined since the first quarter, suggesting some easing of pressure on profit margins," he said.

Greenspan said gasoline inventories are finally beginning to build now that bottlenecks at refineries are subsiding.

However, Greenspan added: "We cannot be certain that the recent spike in gasoline prices in the U.S. is behind us. Nonetheless, it is encouraging that forecasters are calling for prices to decline."

As of last week, the average price of gas in the United States was $1.69 for a gallon of regular unleaded. Prices are up 10 percent from last year and some analysts predict they could reach $2 this summer -and possibly $3 in California and parts of the Midwest.

The IMC conference, which hosts central bankers from around the world, meets through Tuesday.

-- PHO (, June 04, 2001


Energy prices are stabilizing? Bottlenecks at refineries are declining? Apparently Alan is privy to much data I do not have. All I've been reading lately is directly contrary.

Let hope he's right -- probably -- and I'm wrong -- most likely.

-- QMan (, June 04, 2001.

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