He also would not rule out the Fed continuing its course of hiking interest rates even if short-term interest rates become higher than long-term interest rates. That economic condition, known as an inverted yield curve, is generally seen as a indication of a coming recession.
Greenspan argued that an inverted yield curve was not as good an indicator of a recession as it had been in the past. But he said if there was an inverted yield curve, it would be a consideration for the Fed when weighing interest rates.
"Even though its efficacy as predictor is greatly diminished, it's not zero," he said.
Bond prices fell and yields on the 10-year treasury, which moves in the opposite direction, rose, on those comments by Greenspan.
**why don't we just call him the Riddler? He also said he hadn't understood FNM and FRE only until recently.....wooof
SO he didn't recognize the tech bubble, doesn't see housing bubble, didn't recognize trouble at FNM, and now feels an inverted yield curve doesn't mean what it used to??!!
Now you KNOW why Wall Street LOVES Alan Greenspan.
Duratek
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