Federal Reserve Chairman Mr Alan Greenspan has said the US economy seems to be breaking free of some of the constraints on growth and has cautiously embraced the idea of a recovery.
Mr Greenspan said the economy underwent a "significant cyclical adjustment" last year, worsened by the September 11th attacks. "But there have been signs recently that some of the forces that have been restraining the economy over the past year are starting to diminish and that activity is beginning to firm," he said.
His testimony before the Senate Budget Committee today struck a tone noticeably more upbeat than his much-debated speech in San Francisco on January 11th that led markets to expect a quarter-point interest rate cut.
Mr Greenspan offered few specifics on the hot topic of fiscal stimulus except to say the budget picture now was not dire.
But he urged lawmakers to be mindful of pressures that will face the budget in the future, when the huge Baby Boom generation enters its retirement years around 2010.