Greenspan suggests Fed may raise rates

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Thursday, June 17, 1999 | 11:01 a.m.

WASHINGTON -- The U.S. economy is growing fast enough that the Federal Reserve may need to raise interest rates at least once, Fed Chairman Alan Greenspan suggested today in congressional testimony.

"Modest preemptive actions" can prevent "developing unbalances" from threatening an economic expansion that Greenspan said so far is showing few signs of inflation, he said.

That's a signal the Fed chairman will call for a quarter-point increase in the overnight bank loan rate when the policy-making Open Market Committee meets on June 29 and 30, analysts said. Greenspan also suggested that acting now could avoid the need for higher interest rates later.