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Federal Reserve: Policy or politics?

Opinion: Greenspan gang won't mess with good thing before election

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"The picture has brightened." That was Federal Reserve Chairman Alan Greenspan's assessment of the U.S. economy in his semiannual report to Congress this morning. "The gross domestic product expanded vigorously over the second half of 2003 while productivity surged, prices remained stable, and financial conditions improved further. Overall, the economy has made impressive gains in output and real incomes; however, progress in creating jobs has been limited," he said. Not only that, but also "looking forward, the prospects are good for sustained expansion of the U.S. economy," the Fed chairman said. All this good economic news presumably would support an increase in the Fed's benchmark interest rate; however, that is not to be the case–at least for now. Interest rate sensitive sectors of the economy, namely automotive sales and housing, along with consumer spending fueled by mortgage financings are what's keeping the economy afloat beneath those other factors. The Fed isn't in...