By contrast, Michael Evans, chief economist for American Economics Group in Washington, said Saturday he believed the central bank will keep cutting rates as long as the unemployment rate, now at a six-year high of 5.8 percent, continues to rise.
Evans said the economy, as measured by the gross domestic product, probably will turn positive in the first three months of this year, but the recovery will be so weak that unemployment will keep rising until late summer. Many analysts believe the jobless rate will approach 7 percent, still below the 7.8 percent hit as a result of the last recession, in 1990-1991.
"The single most important economic indicator politically is the unemployment rate. Politicians of both parties and Greenspan know this," Evans said.
Greenspan will get a chance to end some of the confusion over his Jan. 11 speech when he appears Thursday before the Senate Budget Committee to tell Congress his views on the economy.
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