Greenspan 'baffled' by intense focus on Fed first rate hike

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  1. sniper-academy

    sniper-academy Administrator Staff Member

    Sep 30, 2011
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    WASHINGTON (MarketWatch) - Former U.S. central bank chief Alan Greenspan said Friday he was "baffled" by the intense focus surrounding deliberations over whether the Federal Reserve should hike rates by a quarter percentage point. In an interview on CNBC, Greenspan said growing entitlement spending is a much bigger concern than monetary policy. Entitlement spending has risen from 5% of gross domestic product in 1965 to 15% of GDP today, he said. This shift of resources has led to a drop in capital investment and subsequent weak productivity, leading to the stagnation we've seen since 2009, he said. "That type of stagnation is not going to go away until we resolve this problem," he said.
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