US rate rise likely after Greenspan testimony
Known for his commentary on international relations and US politics, Rupert Cornwell also contributes obituaries and occasionally even a column for the sports pages. With The Independent since its launch in 1986, he was the paper's first Moscow correspondent - covering the collapse of the Soviet Union – during which time he won two British Press Awards. Previously a foreign correspondent for the Financial Times and Reuters, he has also been a diplomatic correspondent, leader writer and columnist, and has served as Washington bureau editor. In 1983 he published God's Banker, about Roberto Calvi, the Italian banker found hanging from Blackfriars Bridge.
Friday 21 March 1997
"It's almost a done deal. He said he's ready to pull the trigger," commented David Jones, a Wall Street economist, reflecting the widespread view that after leaving short-term rates untouched for more than a year, the Fed will increase them next week, probably by 0.25 percentage points.
In testimony to the congressional Joint Economic Committee, Mr Greenspan depicted a robust economy fuelled by strong consumer demand, with good prospects of sustained growth for the rest of the year. Should the Fed choose to act, he added in the phrase that sent the Dow tumbling as much as 70 points in early trading, "we know from past experience that although the financial markets may respond immediately, the main effects on inflationary pressure may not be felt until late this year and in 1998".
For Wall Street his words were as near as the cryptic Mr Greenspan could come to confirming a move next week.
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