WASHINGTON — Federal Reserve Chairman Alan Greenspan told Congress Thursday that he saw encouraging signs that the country's first recession in a decade could soon end and admitted he had made a mistake in sounding too pessimistic two weeks ago.

        “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,” Mr. Greenspan told the Senate Budget Committee.

        Brian Richard, economist at Cincinnati's Federated Department Stores, agrees a turnaround could be near — but warns that an end to the recession means the economy still is at its bottom.

        “For most people, it's still not good,” said Mr. Richard, a member of the Enquirer's Board of Economists. “There's still some stuff to get through in that regard.”

        That stuff includes continued rising unemployment, which typically lags the other indicators.

        To economists, Mr. Greenspan's remarks signaled that the central bank is now more confident that it has done enough to spur an economic rebound. Many predicted that the central bank, which cut interest rates 11 times last year, will not cut rates at its next meeting Tuesday and Wednesday.

        “Chairman Greenspan changed his tone significantly from downbeat to upbeat,” said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis. “I think the Fed's easing cycle is effectively over.”

        Wall Street, which had fallen when Mr. Greenspan talked about “significant risks” to the economy in a Jan. 11 speech, rallied somewhat on his more optimistic comments Thursday.

        Mr. Greenspan said he had been trying Jan. 11 to dampen expectations on Wall Street that the economy would come roaring back this year.

        “The markets have been assuming a far more rapid snapback than I have,” Mr. Greenspan said, while conceding that he overdid his pessimism with some “unfortunate phraseology.”

        Enquirer reporter Amy Higgins contributed.
       

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