Alan Greenspan, chairman of the Federal Reserve Board, says the recession could be long and deep if the gulf war lasts past April.
Just last week, he told Congress he expected the war's economic consequences to be slight.In an interview published Thursday, Greenspan said he expected a swift recovery from the recession if the war is relatively brief and Persian Gulf oil fields are not extensively damaged.
Greenspan said the optimistic assessment he gave Congress was based in large part on the assumption that the war would be short. He said last week that he expected the recovery to begin no later than summer.
Greenspan said the economy is in the "most confidence-sensitive cycle I've seen in decades. The risks that confidence will not come back sufficiently adequately to bring the economy out of its recession is regrettably higher than I would like," he said.
He refused to say what steps the Federal Reserve Board would take to ease the recession and strengthen banks. He also wouldn't say if he wanted to be appointed to another term.