Greenspan, Lawmakers to Discuss Economy

Federal Reserve Chairman Alan Greenspan will be in the spotlight this week as investors parse his congressional testimony for the answer to the question: Will the Fed raise interest rates again soon?

Greenspan is slated to deliver his twice-annual report on the economy, the so-called Humphrey-Hawkins testimony, to the House Banking Committee on Thursday. His testimony will follow reports last week showing that producer prices and consumer prices displayed few signs of acceleration in June.

Last month, Greenspan and his colleagues on the Federal Open Market Committee raised the overnight bank lending rate by a quarter percentage point to 5%.

* In addition to Greenspan’s forecasts, the government will report on the trade deficit in goods and services Tuesday. Analysts expect that it widened in May, growing to $19.1 billion from $18.9 billion in April as imports outpaced exports.

* New housing construction probably maintained a rapid pace during June. Housing starts probably totaled 1.666 million at a seasonally adjusted annual rate last month versus 1.676 million in May, analysts said. The Commerce Department is scheduled to issue the figures Wednesday.

* The Treasury on Thursday is expected to report a federal budget surplus of $57.7 billion for June, up from $51.1 billion during June 1998. The Treasury is flush with money from two consecutive years of 3.9% economic growth.