US more likely than not to enter recession, says Greenspan

by Richard Kilner

Story link: US more likely than not to enter recession, says Greenspan

Yesterday Alan Greenspan, once the head of the US Federal Reserve, claimed that the US economy was on the verge of recession.

The tumbling housing market was the main cause for the economic downturn, he said, adding that it is now odds on that America will enter recession.

Despite his citation of the poor housing market, he does not believe that the well-publicised credit crunch has had a particularly severe impact on businesses.

Greenspan stated that the loan packages were at fault, not the concept of subprime mortgages themselves.

Recently Greenspan’s successors Ben Bernanke cut interest rates twice in one month, slashing them by 125 basis points.

It is forecast that US interest rates will continue to be cut consistently through March and April.