How Low Should Rates Be?

Throughout his eight-year tenure as Federal Reserve Chairman, Alan Greenspan has kept Wall Street perpetually guessing about the future course of monetary policy. And for good reason. Rather than relying on a single indicator for changing interest rates, such as the money-supply figures Fed Chairman Paul A. Volcker claimed to follow in the 1980s, Greenspan has opted for an eclectic approach. He pores over hundreds of statistical and anecdotal factoids before determining where to set rates.

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