GREENSPAN: ECONOMY IN GOOD SHAPE, SOCIAL SECURITY MUST BE WORKED ON "BY 2008"
AP
 

WASHINGTON (AP) -- Federal Reserve Chairman Alan Greenspan told Congress on Wednesday that the economic expansion rolled into the new year at a respectable pace and that inflation -- while not an immediate threat -- is something policy-makers must continue to guard against.

Greenspan, delivering the Fed's twice-a-year economic outlook to lawmakers, struck a fairly positive tone about the economy, which had been mired in a mid-year lull last year and has since improved.
 

"All told, the economy seems to have entered 2005 expanding at a reasonably good pace, with inflation and inflation expectations well-anchored," Greenspan said in prepared testimony before the Senate Banking Committee.
 

How inflation fares in the coming months, however, will shape whether Fed policy-makers -- now on a gradual path of raising short-term interest -- will need to adjust the speed of the campaign by either speeding up or slowing down, Greenspan indicated.