Of the international scene, Greenspan said that, despite problems in several nations including Japan and Argentina, there was little chance of a repeat of the type of contagion that wreaked havoc in financial markets during the Asian financial crisis of 1997-1999.
"The problems that we have seen are in one sense more domestic than they are international," Greenspan said. "The tinder out there ? is much less than it was in 1997, there are very few fixed exchange rate problems, the extent to which debt was extended is much less, the reserves are better."
Northern Trust Co chief economist Paul Kasriel said Greenspan's remarks on consumer confidence and international issues may suggest the Fed chairman is seeing a silver lining.
"He seemed a little bit more upbeat than last week," he said. "I guess he's encouraged by the consumer confidence numbers. He seemed to play down the international thing that a lot of people aren't playing down."
Greenspan's somber tone last week was largely unexpected and solidified expectations the Fed would cut rates by a quarter-percentage point at its next meeting on Aug. 21.
During questioning on Tuesday, Greenspan said he did not see a near-term inflation threat, suggesting the Fed can be comfortable cutting rates without sparking a run-up in prices.
"All of our measures suggest fairly firmly that inflation is being contained," he said.
The Fed has cut rates this year by a total of 2-3/4 percentage points to assist the struggling US economy. Overnight interest rates, which affect borrowing costs for consumers and companies across the economy, now stand at a seven-year low of 3.75 percent.
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