By Evelina M. Tainer, Chief Economist, Econoday
3/1/02

Fed chairman Alan Greenspan testified on monetary policy this week before a House Committee, basically saying that signs of an economic firming are in place though there remains a risk towards weakness. This heartened bond market players because it means that the Fed isn't likely to raise rates in the next couple of months; it cheered equity investors because Greenspan is seeing signs of economic recovery.

This week the signs of recovery were unmistakable. Fourth quarter GDP growth was revised upward, home sales skyrocketed in January, and various manufacturing reports all headed higher. One month doesn't make a trend is an old economist saying. Let's keep it in mind but we can be cautiously optimistic, just like the Fed chairman.