COLLEEN MCEDWARDS, CNN ANCHOR: On the Senate side of the Capitol, Federal Reserve Chairman Alan Greenspan is likely to face some tense questioning this morning. At issue: the state of the economy. Analysts will also listen for hints about whether more interest rate cuts are in the pipeline. Fred Katayama of CNN Financial News is on Capitol Hill for us now -- Fred.</s>FRED KATAYAMA, CNN CORRESPONDENT: Good morning, Colleen. Well, investors will be looking for any clues on the direction of interest rates and the outlook for the economy. Federal Reserve Chairman Alan Greenspan is expected to explain why the Fed took the drastic measure of making two interest rate cuts in January, and by a full percentage point at that. Regarding the economy, he'll talk about the positive and the negative. On the negative side, he may address the issue of high energy costs and falling consumer confidence and say that the economy still faces a threat of a recession. On the positive side, he may note that inflation is still low and that the economy is undergoing a sharp inventory correction: that is, companies are adjusting their stockpiles in the wake of a slowing economy. And some economists say that may insinuate that there's a sharp recovery to come in the second half. Also, he is expected to say that the interest rate cuts in January may have helped the economy. For one, auto sales and retail sales have improved. At the same time, Chairman Greenspan has to walk a very fine line. He has to indicate or signal to investors that there are more interest rate cuts to come -- at the same time, not sound too gloomy lest he sap investor and consumer confidence -- Carol and Colleen.</s>MCEDWARDS: CNN Fred Katayama, thanks.
Alan Greenspan Addresses State of the Economy Before Congress Today