US Federal Reserve Chairman Alan Greenspan dampened speculation about an imminent recovery in the American economy, warning that while it showed signs of a rebound it still faced risks ahead.
Mr Greenspan's remarks suggest that another short term interest rate cut is on the cards, following 11 reductions last year as the economy slipped into recession.
"I would emphasize that we continue to face significant risks in the near term," Mr Greenspan said in a speech in San Francisco.
"There are sound reasons for concluding that the long-run picture remains bright, and even recent signals about the current course of the economy have turned from unremittingly negative through the late fall of last year to a far more mixed set of signals recently," he told the Bay Area Council Conference.
He said that indications of greater stability after the September 11th attacks had been occurring with increasing frequency but that that it was too early to say that the dangers had passed.
Mr Greenspan also warned that the pace of lay-offs by US companies had risen sharply, though the rate of increase had declined suggesting some abatement in the rate of job loss.
"The unemployment rate may well continue to rise for a time and job losses may put a damper on consumer spending," he said.
This would determine the all-important level of consumer spending, he emphasised.