On january 3rd 2001 Mr Greenspan had a new-year gift for America's gloomy financial markets. Outside the normal schedule of its meetings, the Federal Reserve cut the fed funds rate by half a percentage point, to 6%. But the markets' joy did not last long: the dotcom bubble had burst and the economy was already sliding into recession.rnTwo and a half years and another dozen cuts later, the fed funds rate wasrnfully five percentage points lower. The Fed had seen one reason after another to ease policy. After the tumble into recession in 2001 came that September's terrorist attacks on New York and Washington, dc. By 2003 Mr Greenspan was worrying that America might be on the way to deflation, with prices falling. In June, he says in his book, "deflation was Topic a". The Fed cut rates to 1%, the lowest since 1958, where they remained for a year.
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