Greenspan sees one-third chance of recession in US economy

Former Federal Reserve chairman, Alan Greenspan, has once again risked rousing renewed controversy recently when he told the Bloomberg news agency that there was a ‘one-third probability’ of a US recession this year. Speaking to the agency Alan Greenspan said, ‘there’s a one-third probability of a U.S. recession this year and the current expansion won’t have the staying power of its decade-long predecessor’. Moreover, ever since it was first reported last week that Greenspan has suggested that a recession in US economy is imminent, the former Fed chairman has been protesting his innocence and saying his comments were misconstrued. The latest declaration by him cannot be dubbed his latest protestation of innocence as the recent comment is just a moderated one to the tune of Bush administration. Greenspan has said that he didn’t believe that so-called point forecasts, where economic experts sharpen their outlook down to decimal points, could be accurately made in the near-term. He further extended that it is really difficult to forecast the economy over the next two years. Greenspan’s fresh remarks come just about a week after he told investors in Hong Kong that he thought a US recession this year was ‘possible’. The previous comments spread rapidly through the investment community, spooking investors and contributing to confusion in financial markets. However, following a worldwide sell-off in stocks and other assets, it seems that Greenspan was forced to explain his statement, declaring he had said that a recession this year was ‘possible’ but not ‘probable’.

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