So why didnt the traditionally risk-averse Greenspan cut rates now as insurance against the dangers dogging growth? For one thing, he still thinks the economy is in recovery mode. Consumer demand remains buoyant and has even been turbocharged recently by a new wave of mortgage refinancing. Economists reckon that homeowners will extract some $100 billion in cash from their houses in the second half of this year. And despite all the corporate gloom, business spending has shown signs of picking up, though not anywhere near as strongly as the Fed would like.
Does that mean that further rate cuts are off the table? Hardly. Watch for Greenspan to try to time any rate reductions to when theyll have the most psychological pop on business and investor confidence. Thats surely no easy feat, but its one that Greenspan has shown himself capable of more than once in the past. Dont be surprised if he surprises everyone again.
41. Alan Greenspan owes his reputation much to _______________.
A. his successful predictions of economy
B. his timely handling of interest rates
C. his unusual economic policies
D. his unique sense of dangers
42. It can be inferred from the passage that _________________.
A. instincts most often misguide the monetary policies
B. Greenspan has lost his control of the central bank
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