KYRA PHILLIPS, CNN ANCHOR: Here in the U.S., lawmakers are focusing on the nation's economy, hoping to get a sense of what may lie ahead. Federal Reserve Chairman Alan Greenspan is testifying this hour before the Senate Banking Committee. CNN's Fred Katayama joins us now from Capitol Hill with the latest. Fred, I guess consumer confidence may be down, but so is inflation. That's not such a bad thing.</s>FRED KATAYAMA, CNN CORRESPONDENT: Not a bad thing at all, Kyra. But Greenspan is balancing his remarks. The Fed chairman is expected to testify that the long-term prospects for the economy remain quite favorable, but that for the short term it looks sluggish; basically that the downside risks predominate in the near term. And he'll say that the risk of economic weakness remains in the foreseeable future. Specifically, he warns that consumers and business are cutting back on spending. He says that high prices for energy is sapping or rather weakening demand. Overseas economies are weakening, and that is slowing U.S. export growth, and that lenders have turned cautious. Now, as a result, Greenspan predicts that the U.S. economy will grow 2 to 2 1/2 percent this year. That's a slowdown from 3 1/2 percent from last year. As for unemployment, he expects it to rise to 4 1/2 percent this year. That's down from -- that will be an increase from 4 percent last year. On the positive side, he notes that pricing pressures remain subdued, and therefore he expects inflation to abate to 1 3/4 to 2 1/4 percent this year, down from 2 1/2 percent last year, basically saying that consumer confidence, while slipping, remains consistent. in his words, with economic growth -- Kyra.</s>PHILLIPS: All right, Fred, thanks so much.
Greenspan to Give Semiannual Economic Outlook to Congress Today