Damn interesting article...
[
link to www.marketwatch.com]
Next Fed chief faces uncharted waters
By Greg Robb, MarketWatch
Last Update: 12:01 AM ET Aug. 24, 2005
WASHINGTON (MarketWatch) -- Whoever replaces Alan Greenspan as Fed chief will have to navigate the economy through so many uncharted and dangerous waters, it´s a wonder anyone wants the job.
On top of that, housing prices are certainly overpriced if not in a bubble, and will be a headache whether prices keep rising or if they fall.
And no Fed chief can rest easy with energy prices at current high levels because stagflation (high inflation mixed with stagnant growth) is certainly a possibility.
Finally, looming over the economic landscape are the low U.S. savings rate and large current account deficit that are forcing economists to rewrite the textbooks.
"It could be that we have a soft landing and the new chairman comes in and says ´wonderful´ and has a quiet period to work with," said former Fed Gov. Lawrence Meyer.
"But there are many other alternatives here," Meyer said.
"A big stack of issues could pop up," agreed Ethan Harris, chief economist for Lehman Brothers.
[cont´d at link]
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