Greenspan Cautions on Risk of Rising Rates

Discussion in 'Up to the Minute' started by Buzz Mills, Sep 27, 2005.

  1. Buzz Mills

    Buzz Mills New Member

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    Greenspan Cautions on Risk of Rising Rates

    WASHINGTON - Federal Reserve Chairman Alan Greenspan issued a fresh warning on Tuesday that investors shouldn't be lulled into a false sense of security by the economy's long stretch of low interest rates.

    "History cautions that extended periods of low concern about credit risk have invariably been followed by reversal, with an attendant fall in the prices of risky assets," Greenspan said in a speech delivered via satellite to a meeting of the National Association for Business Economics in Chicago. Greenspan, in Tuesday's speech, didn't specify what risky assets he was referring to. But the Fed chief has been sounding an alarm for months — including an emphatic warning on Monday — about the perils to home owners and lenders using risky and exotic types of mortgages.

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