Greenspan sees no need for interest rate hike

updated 12:50 p.m. ET Aug. 2, 2009

WASHINGTON - Former Federal Reserve Chairman Alan Greenspan says he doesn't think the Fed should be considering raising interest rates to ward off inflation — at least not yet.

Greenspan says the Fed will have to rein in credit and raise rates at some point. For now, he says he is optimistic for the U.S. economy.

The former Fed chief cites many caveats for his short-term optimism, among them the huge government deficit and a concern that home prices may not have stabilized enough.

Greenspan says he is pretty sure that the economy has already hit bottom. He says promising indications include good news from weekly production figures for different industries.

Greenspan spoke Sunday on ABC television's "This Week."

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