So far, so good. Unlike many of the dot coms, the diverse U.S. economy has fundamental strengths. By latest reports, the industrial sector is reviving. Housing and auto sales remain strong. Imports are down.
Inflation is tame.
Moreover, Greenspan and the Fed maximized the rate cut's impact by announcing it when Wall Street was already chipper and had shrugged off recent bad earnings news from Intel and Cisco Systems. That kind of rally, if sustained, can head off a lot of trouble. And evidently, the Fed saw trouble ahead. And with the market in a funk, companies unsure of next quarter's prospects were not investing in their future growth. Greenspan has staked his professional reputation on the theory that the economic boom that started in 1991 was powered by business investment.