Washington Wire
GREENSPAN FACES a potential showdown at Tuesday's Fed meeting.
For months, the chairman's resistance to higher interest rates and scant evidence of rising price
inflation have kept the Fed from boosting rates. But the economy's momentum and the
plunging jobless rate make some Fed officials uneasy about inflation risks. At 4.3%, the
jobless rate is at the lowest peacetime level since 1957.
Greenspan has said little in public about the economy since the report that Fed officials in
March had agreed to lean toward higher rates. He has enough clout to delay a rate rise if he
expects the economy to slow soon. Worries about jittery financial markets in Asia also argue
for holding off until the Fed's July 1 meeting or beyond.