Greenspan says Fed aggressive on inflation

The Federal Reserve will do 8216;8216;what is required8217;8217; to keep inflation in check if the forecast behind its view that US interest rates can rise gradually proves wrong, Fed Chairman Alan Greenspan said on Tuesday.

Greenspan, speaking to a group of bankers in London by satellite, suggested the Fed was prepared to act aggressively if needed to stem inflation, even as he restated the central bank8217;s view that it could likely act at a 8216;8216;measured8217;8217; pace. 8216;8216;That conclusion is based on our current best judgment of how economic and financial forces will evolve in the months and quarters ahead,8217;8217; he said. 8216;8216;Should that judgment prove misplaced 8230; the Fed is prepared to do what is required to fulfill our obligations to achieve the maintenance of price stability.8217;8217;

A feed of his remarks to the conference, where he was part of a panel with European Central Bank President Jean-Claude Trichet and Bank of Japan Deputy Governor Toshiro Muto, was made available in Washington. The Fed has held overnight interest rates at a 1958 low of 1 per cent since last June. But it is widely expected to bump them up by a quarter percentage point at the conclusion of its next meeting on June 29-30. 8212;Reuters