fomc.txt

Testimony of Chairman Alan Greenspan Federal Reserve Board's semiannual monetary policy report to the Congress Before the Committee on Financial Services, U.S. House of Representatives February 27, 2002

Since July, when I last reported to you on the conduct of monetary policy, the U.S. economy has gone through a period of considerable strain, with output contracting for a time and unemployment rising. 
We in the Federal Reserve System acted vigorously to adjust monetary policy in an endeavor both to limit the extent of the downturn and to hasten its completion. 
Despite the disruptions engendered by the terrorist attacks of September 11, the typical dynamics of the business cycle have re-emerged and are prompting a firming in economic activity. 
An array of influences unique to this business cycle, however, seems likely to moderate the speed of the anticipated recovery.

At the time of our last report, the economy was weakening. 
Many firms were responding to the realization that significant overcapacity had developed. 
The demand for capital goods had dropped sharply, and inventories were uncomfortably high in many industries.