facebook
twitter
search
search

Greenspan says U.S. recession possible

May 27, 2008 at 3:18 PM
| License Photo

WASHINGTON, May 27 (UPI) -- Former U.S. Federal Reserve Chairman Alan Greenspan said Tuesday chances of a severe recession had diminished recently, but a mild economic downturn is likely.

"I still believe there is a greater than 50 percent probability of recession," Greenspan told The Financial Times. "But, that probability has receded a little and I think the probability of a severe recession has come down markedly."

Greenspan told the Times that house prices could experience another 10 percent decline before reaching bottom.

"Such house price declines imply a major contraction in the level of equity in owner-occupied homes, the ultimate collateral for mortgage-backed securities," he said.

Greenspan also outlined the risk of increased household savings, the Times reported.

Increased savings would have a negative impact on spending, which would slow the economy further.

Related UPI Stories
Latest Headlines
Trending Stories
Chelsea Clinton accidentally calls Bernie 'President Sanders'
Watch every star-studded Super Bowl commercial of 2016
Susan Sarandon responds to Piers Morgan criticizing cleavage
Two Virginia Tech students plotted 13-year-old's death, prosecutors said
Colin Powell, Condoleezza Rice got classified email on private accounts