http://www.yahoo.com/headlines/current/business/stories/fed.html (Einblicke ins Internet, ~06/1995)
WASHINGTON (Reuter) - As Congress and the Clinton administration prepare to do battle over the budget, Federal Reserve Chairman Alan Greenspan and fellow bankers meet Friday in Wyoming to discuss what to do if the deficit is cut.
The discussions will be part of a broader examination of deficits and debt by U.S. and foreign central bankers, academics and businessmen at a conference sponsored by the Kansas City Federal Reserve Bank.
If President Clinton and Congress are able to thrash out a deal in the next month to balance the budget, they'll be looking to the Fed to offset any short-term drag on the economy from spending cuts with lower interest rates.
Greenspan has shied away from promising anything in advance, although he has pledged to take the likely effects of budget policy into account in setting interest rates.
Cuts in government budget deficits tend to crimp economic growth in the short-run, but in the long-run are good for the economy by freeing up money for use by the private sector.
The U.S. central bank left short-term interest rates unchanged at a policy-making meeting last week after cutting them in July for the first time in nearly three years.
Analysts are divided over what comes next, although many expect the Fed to reduce rates further in the future, perhaps in conjnction with a deal to balance the budget.
The Congressional Budget Office, a research arm of Congress, calculates that a deal to balance the budget in seven years would pave the way for a one percentage point cut in real, inflation-adjusted interest rates.
Fed officials though fear the economy may first have to endure a budget ``train wreck'' in which government fiscal policy is paralyzed before Clinton and Congress can settle their differences over how to end the red ink.