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Thu, May 17, 2001 - Page 19 News List

Capital spending push seen to be behind reduction

Greenspan's strategy contains some risks, analysts caution, as the cuts still may not be enough to spur the US economy into a recovery very quickly. The nation's GDP growth could well remain sluggish for several months

By Art Pine  /  BLOOMBERG , WASHINGTON

Nevertheless, the central bank has raised new questions over its willingness to brush the inflation issue aside, even in the face of sharp increases in labor costs and energy prices.

"People thought they needed to address inflation," said David Orr, chief economist at First Union Corp in Charlotte.

"They addressed it by saying there is no problem, which I find fascinating." Or possibly worrisome, a few months down the road.

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