Washington — Federal Reserve Chairman Alan Greenspan said Thursday there were mounting signs of an economy recovering from recession, an upbeat assessment that encouraged Wall Street.
Conceding that he came across as too gloomy earlier in the month, Greenspan did not include a warning he had made on Jan. 11 in San Francisco that the country continued to face significant economic risks.
Those comments pulled markets lower, but Greenspan's more optimistic remarks Thursday to the Senate Budget Committee helped push stocks solidly higher. The Dow Jones industrial average closed up 65.11 points at 9,796.07.
Asked by lawmakers about his changed tone, Greenspan said he had been trying on Jan. 11 to dampen expectations on Wall Street that the economy would come roaring back this year. He said Thursday the rebound probably would be less robust, given that the recession has been a mild one.
"The markets, however, had been assuming a far more rapid snap-back than I, frankly, think is likely to happen," Greenspan said.
But he said he had overdone his pessimism. "That created, unfortunately, I think, phraseology, which in retrospect I should have done differently," Greenspan said. He said his comments implied "that I didn't think the economy was in the process of turning, and I tried to rectify that in today's remarks."
Economists viewed Green-span's latest comments as a sign that the Fed believes it has reduced rates enough to spur an economic rebound this year. Analysts predicted the central bank would not lower rates when it meets next week.
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