Greenspan Says ‘Mistake’ to Say Inflation No Longer on Horizon

Former Federal Reserve Chairman Alan Greenspan said that it’s a mistake to believe that inflation isn’t a threat, though he doesn’t see an imminent rise in prices.

Greenspan spoke at an event in Washington today after a report from the Labor Department showed that producer prices rose by the most in more than a year in April.

“It came in as a big surprise,” Greenspan said at a forum organized by the Peter G. Peterson Foundation. “Now, I’m not forecasting that inflation is about to run. I doubt it very much. But the presumption that it’s no longer on the horizon I think is a mistake.”

The 0.6 percent increase in the producer price index was the biggest since September 2012 and exceeded all estimates in a Bloomberg survey of economists, today’s Labor Department report showed.

“I don’t know whether or not that is other than a blip, but if inflation is beginning to pick up, it’s got to start somewhere, and it usually starts the way we’re looking at it,” Greenspan said.

To contact the reporter on this story: Matthew Boesler in New York at mboesler1@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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