Federal Reserve Chairman Alan Greenspan said the central bank has been pushing down interest rates in an effort to keep the country out of a recession and acknowledged the Fed's best efforts might not be enough. After a year of raising interest rates to dampen inflationary pressures, Mr. Greenspan said, the Fed switched course in June and began lowering rates because of signs of a weakening economy.
Greenspan, making his midyear report to Congress late last week, said the Fed's policies would seek to avoid ``an unnecessary and destructive recession.'' He said the Fed must weigh the dangers of a recession against the risk that too loose a monetary policy could spark an inflationary spiral.
The Fed forecast that the overall economy would grow at an annual rate of between 2 and 2.5 percent. This was lower than the administration's revised forecast of 2.7 percent growth.