 Mr Greenspan is too cautious for some policy makers |
US Federal Reserve chairman Alan Greenspan should get another term in office, President George W Bush has said, healing a rumoured rift between the White House and the country's central bank. Earlier this year, Washington was awash with rumours that the Bush administration was likely to demand the removal of Mr Greenspan, whose current term ends in the middle of next year.
Mr Greenspan is reportedly an opponent of a $726bn tax-cut programme, which Mr Bush says will help stimulate the economy over the next 10 years.
Although Mr Greenspan has a towering reputation in global financial markets, there has been a growing feeling that his monetary policies were not doing enough to help the sluggish US economy grow.
Mr Bush's comments seem to be an attempt to put an end to the speculation, which had helped unsettle the markets in the run-up to the Iraqi war.
Totemic figure
The endorsement from Mr Bush comes as Mr Greenspan is preparing to undergo surgery for an enlarged prostate.
The ailment is not believed to be serious, and Mr Greenspan is expected back at work next week.
Mr Greenspan, who turned 77 in March, has been serving as Fed chairman since August 1987.
During that time, he has built up a reputation as the world's leading monetary policy maker, a totemic figure for investors around the world.
Too cautious?
Mr Greenspan's reputation peaked at the end of the 1990s, when the US economy was growing extremely fast; since then, he has come in for mounting - but still extremely mild - criticism.
Since September 11, the Fed has cut interest rates to a 41-year low of 1.25%.
But the lack of a rapid general rebound has led some commentators to argue that monetary measures are no longer the best way to manipulate the economy.
At the same time, Mr Greenspan has been accused of excessive caution in his handling of the economy.
Fiscal fight
This reputation for caution made Mr Greenspan the focus of political controversy at the beginning of this year.
He was seen as one of the leading opponents of Mr Bush's aggressive tax-cutting policies.
The Bush administration focused its tax cuts on stock market dividends, hoping that a share boom would be the best stimulus to the economy.
But Mr Greenspan, who has previously warned of boom-and-bust cycles in financial markets, is sceptical of the wisdom of what amounts to subsidising share investors with public money.
One-Minute World News 
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