Greenspan Sees Above-average Growth and Low Inflation, Distillate Inventories Rise Again

- The EIA reported that crude inventories fell 900K barrels versus estimates of a 3.45M barrel decline. Gasoline inventories fell 1.32M barrels versus estimates of a 1.5M barrel fall. Distillate Inventories rose 2.23M barrels versus estimates for rise of 1.65M barrels.

BOTTOM LINE: Here is a summary of Greenspan’s testimony today:

1) Fed must continue to raise interest rates.
2) Inflation pressures likely to be “contained.”
3) Forecasts 3.5% Q4 to Q4 US 2005 economic growth.
4) Sees Q4 to Q$ US growth of 3.25%-3.5% in 2006.
5) Sees “speculative fervor” in some housing markets.
6) National economy not at risk from home prices.
7) Drop in long-term rates is major uncertainty.
8) Long-term rates behavior due to global forces.
9) Terrorism, protectionism and deficits are risks.