Dive Brief:
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Former Federal Reserve Chairman Alan Greenspan said Tuesday housing and construction are not growing fast enough for a strong, post-recession economic recovery.
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“What we see is that construction is dead in the water,” Greenspan said at a New York conference. He noted that construction led the country to past recoveries.
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Greenspan, who chaired the Fed for nine years until 2006, blamed slow wage growth and tight credit for stopping would-be homeowners from investing in real estate. “What they are saying is ‘we are so uncertain about the distant future that we are not going to invest,” Greenspan said.
Dive Insight:
The economist predicted an eventual rise in interest rates and inflation, but did not speculate as to when.