Senate Approves Greenspan for Fifth Term as Fed Chairman - 6/21/2004 - Mortgage Loan Refinance Debt Equity

Senate Approves Greenspan for Fifth Term as Fed Chairman

At his Senate confirmation hearing on June 15, Greenspan presented an upbeat economic outlook, downplayed inflation fears and said that he sees few obstacles to continued job growth.

“Our best judgment is that the economy is growing in a solid fashion. Inflationary pressures are not likely to be a serious concern in the period ahead,” Greenspan told members of the Senate Banking Committee. He added that the Fed’s actions were “very likely to be measured over the quarters ahead.”

Asked whether the economy will continue to add a significant number of new jobs each month, continuing a trend that began earlier this year, Greenspan said, “We see nothing in the immediate outlook to suggest any major change in the path of employment growth going forward.”

In another area of note to the nation’s home builders, the Fed chairman said that if higher interest rates were to slow the U.S. housing market, it would have little effect on the health of Fannie Mae and Freddie Mac, two of the nation’s largest mortgage financiers that have come under increasing congressional scrutiny in recent months.

“I have no problem with the way they manage their structure of both their portfolio and the securitization parts of their business. I think it is rather well-done. They do a fairly impressive job,” he said.

Greenspan did reiterate his concern regarding the size and scope of the GSEs, but acknowledged that  "they have slowed their rate of growth recently, and I trust that's the beginning of a conscious trend."

Greenspan, 78, has been Fed chairman since being appointed to the position in 1987 by President Ronald Reagan.

He will preside over the Federal Open Market Committee, which sets interest rates, when the panel convenes its next meeting on June 29-30.