SINGAPORE (AFX-ASIA) - U.S. Federal Reserve Chairman Alan Greenspan said that there are currently no inflationary pressures and that the dollar is strong.
"At the moment, we do not see inflationary pressures ... The exchange rate is firm and rising," Greenspan told central bankers and heads of international financial institutions in a video conference at the annual International Monetary Conference. "There is very little in the way of short-term inflationary expectations," Greenspan added.
"My own impression is that inflation is not a significant problem," Greenspan said, but added that it should be consistently watched. "I think all of us are accurately aware of the potential underlying inflation but we do not see this process emerging," Greenspan said. He said the energy problem in the U.S. is one of the factors which has affected slowing growth but one that has received the least attention.
"However, a heightened wariness of recent developments (in energy prices) reflects the possibility that the responsiveness of American gross domestic product to energy prices may escalate in the event of abnormal price movements," Greenspan said.