Greenspan optimistic about economy

WASHINGTON -- Federal Reserve Chairman Alan Greenspan said Thursday there are mounting signs the economy is recovering from recession, an upbeat assessment that encouraged Wall Street. \nConceding that he came across as too gloomy earlier in the month, Greenspan did not include a warning he had made in San Francisco Jan. 11 that the country continued to face significant economic risks. \nThose comments pulled the stock market lower, but Greenspan's more optimistic remarks to the Senate Budget Committee Thursday helped push stocks solidly higher. The Dow Jones industrial average closed up 65.52 points at 9,796.48. \nAsked by lawmakers about his changed tone, Greenspan said he had been trying Jan. 11 to dampen expectations on Wall Street that the economy would come roaring back this year. He said the rebound will probably be less robust, given that the recession has been a mild one. \n"The markets, however, had been assuming a far more rapid snap-back than I, frankly, think is likely to happen," Greenspan said. \nBut he said he had overdone his pessimism.\n"That created, unfortunately, I think, phraseology, which in retrospect I should have done differently," Greenspan said.\nHe said his comments implied "that I didn't think the economy was in the process of turning, and I tried to rectify that in today's remarks." \nTo revive the economy, which slid into recession in March, the Federal Reserve cut short-term interest rates 11 times last year. \n"We are just at this particular point turning, as best as I can judge," Greenspan said. \nEconomists viewed Greenspan's latest comments as a sign that the Fed believes it has reduced rates enough to spur an economic rebound this year. Analysts predicted the central bank would not lower rates again at its next meeting Jan. 29-30. \n"I think they are done cutting rates," said David Wyss, chief economist at Standard & Poor's Co. \nMerrill Lynch's chief economist, Bruce Steinberg, agreed.\n"We are changing our Fed call and now expect the Fed to hold policy steady" Steinberg said at the January meeting. \nAsked whether he thought Congress needed to take more steps to stimulate the economy, Greenspan said he didn't think that was essential given signs of a rebound.