The persistence of bloated U.S. trade deficits over time can pose a risk to the U.S. economy, which thus far has proven resilient, Federal Reserve Chairman Alan Greenspan warned today. Policy-makers must not become complacent, he said.
The broadest measure of trade, called the current account deficit, swelled to an all-time high of $166.2 billion in the second quarter of this year, the most recent period.
"Current account imbalances, per se, need not be a problem, but cumulative deficits ... raise more complex issues," Greenspan said in speech in Frankfurt, Germany. A copy of his remarks was distributed in Washington.