March 7 (Bloomberg) -- Former Federal Reserve Vice Chairman Alan Blinder said Alan Greenspan may be distracting investors from the Fed's forecast that growth will strengthen this year.

Greenspan, who was Fed chairman for almost two decades until Ben S. Bernanke took over 13 months ago, said at least three times in the past two weeks that a recession is possible. He didn't say one was likely.

``It is a little bit of a problem,'' Blinder, now a professor at Princeton University in New Jersey, said in an interview. ``He is sort of stepping on the message. The Fed's message is things look pretty good and in particular we are not at all worried about a recession.''

Current Fed officials are stressing that they don't predict a recession, even after last week's global equities plunge and a run of weaker-than-forecast economic data. Chicago Fed President Michael Moskow said in a speech today that he's not prepared to significantly alter his forecast for a pickup.

The Fed's Beige Book survey published today showed four of the dozen district reserve banks noted some slowdown, though the general tone of the report was upbeat. The Fed reported continued growth in retail sales, services and demand for labor.

Greenspan said in an interview on March 5 that there's a ``one-third probability'' of a U.S. recession this year and the current expansion won't have the staying power of its decade- long predecessor. The Fed expects the economy to grow between 2.5 percent and 3 percent this year, according to forecasts presented to Congress last month.

`Didn't Need This'

``He made it very clear he views it as a possibility, but not a probability,'' said Blinder, 61. ``People at the Fed are probably frowning a little bit, like, `We didn't need this.'''

Greenspan, 81, continues to speak. He told a technology conference in New York today that the housing market may have reached a bottom, Reuters reported, repeating an observation he made in Canada last month.

He also said today that the so-called carry trade, where investors borrow at low interest rates in countries such as Japan and buy higher-yielding assets elsewhere, will end, Reuters added. Greenspan's office declined to comment.

Greenspan this week said he has been careful to avoid creating headaches for the 53-year-old Bernanke.

His contracts with clients stipulate that there will be no reporters present and no recordings. Greenspan said he tries to have an exchange with an audience, where he often learns something that helps him hone skills he has worked on for 50 years.

``I was aware of the problem that if I stayed public, I could make it difficult for Ben,'' Greenspan said in the interview in his Washington office. ``For the most part it has worked. I was beginning to feel quite comfortable that I was fully back to the anonymity I was seeking.''

To contact the reporter on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net

Last Updated: March 7, 2007 17:19 EST