Former Federal Reserve Chairman Alan Greenspan said the U.S. economy, which has been buffeted by speculation in the housing and stock markets, faces a more immediate threat from inflation than from additional speculative bubbles.
In Montreal yesterday, he said containing inflation may require very tight monetary policies in future years. Mr. Greenspan, 82, who served as Fed chairman from August, 1987, to January, 2006, said oil prices are in a long-term trend higher, though part of the current increase may be driven by speculation.
He added that the U.S. credit crunch since last August continues to be very serious.
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