Joint Economic Committee Holds Hearing on "The Economic Outlook"
Joint Economic Committee Holds Hearing on “The Economic Outlook”
Washington, DC—Joint Economic Committee Chairman, Robert F. Bennett, held a hearing today where he invited Federal Reserve Chairman Alan Greenspan to testify on “The Economic Outlook.” Chairman Bennett made the following statement:
Mr. Chairman, today you visit us at a time of good economic news. The economy is growing rapidly and adding new jobs, thanks to well-timed tax relief, aggressive Fed policy, and the amazing resilience of the American economy.
What a difference a year makes. A year ago, Mr. Chairman, you appeared before this committee, and we talked a great deal about deflation. Today, we meet amid speculation about inflation.
Last week we learned that consumer prices have been rising faster than expected. Moreover, commodity prices are much higher than they were a year ago, due to the strengthening world economy and a lower dollar. Higher commodity prices may eventually lead to higher consumer and producer prices – as we have already seen with gasoline – but the real question is whether they signal broader price increases ahead.
In the sometimes topsy-turvy world of economics, the bond market has treated recent gains in employment as bad news, driving bond prices down and interest rates up. Employment growth is, of course, an unmitigated good for the economy, but it does sharpen the question of how long the Fed will be able to maintain such low interest rates and how and when the Fed may move to a more neutral policy stance. We welcome any insight you can provide on this issue.
We also welcome your thoughts on the housing market. Housing has been remarkably strong in recent years, boosting the recovery and building wealth for millions of American families. Low mortgage interest rates have been key to housing’s strength, lifting home prices in much of the nation, but also raising the cost of living for new home buyers. We need to understand how rising home prices may contribute to inflation. And looking ahead, we also need to understand
how rising interest rates may affect the housing market.
Testimony from the hearing can be viewed at:
https://www.jec.senate.gov/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=75
Washington, DC—Joint Economic Committee Chairman, Robert F. Bennett, held a hearing today where he invited Federal Reserve Chairman Alan Greenspan to testify on “The Economic Outlook.” Chairman Bennett made the following statement:
Mr. Chairman, today you visit us at a time of good economic news. The economy is growing rapidly and adding new jobs, thanks to well-timed tax relief, aggressive Fed policy, and the amazing resilience of the American economy.
What a difference a year makes. A year ago, Mr. Chairman, you appeared before this committee, and we talked a great deal about deflation. Today, we meet amid speculation about inflation.
Last week we learned that consumer prices have been rising faster than expected. Moreover, commodity prices are much higher than they were a year ago, due to the strengthening world economy and a lower dollar. Higher commodity prices may eventually lead to higher consumer and producer prices – as we have already seen with gasoline – but the real question is whether they signal broader price increases ahead.
In the sometimes topsy-turvy world of economics, the bond market has treated recent gains in employment as bad news, driving bond prices down and interest rates up. Employment growth is, of course, an unmitigated good for the economy, but it does sharpen the question of how long the Fed will be able to maintain such low interest rates and how and when the Fed may move to a more neutral policy stance. We welcome any insight you can provide on this issue.
We also welcome your thoughts on the housing market. Housing has been remarkably strong in recent years, boosting the recovery and building wealth for millions of American families. Low mortgage interest rates have been key to housing’s strength, lifting home prices in much of the nation, but also raising the cost of living for new home buyers. We need to understand how rising home prices may contribute to inflation. And looking ahead, we also need to understand
how rising interest rates may affect the housing market.
Testimony from the hearing can be viewed at:
https://www.jec.senate.gov/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=75
