Former Federal Reserve Chairman Alan Greenspan weighed in on the economic picture and he said he expects things to “flatten out.” Greenspan believes the economy will grow 3 to 4 percent annually for the next 6 months or so before things start to slow down once again. Greenspan believes the stock market will flatten out and the economy will then follow, though he does say he doesn’t believe the United States economy will fall back into a recession.

The former chief of the Fed also said that the current $2 trillion balance sheet the Federal Reserve has is “not sustainable.” In the short-term Greenspan says that inflation is no concern, but if the Fed fails to reign in the stimulus programs it has used in the past year it could become a problem in the future. On the other hand Mr. Greenspan also said he is concerned that political pressure could prevent the Federal Reserve from doing what they need to do to keep consumer prices in check.

Though Greenspan is no longer the head of the Federal Reserve, his comments certainly still move the market and lots people want to know what he has to say. Basically Mr. Greenspan believes that the current economic growth that appears to be starting will stall out in 2010, but he doesn’t believe another recession is on the way anytime soon. He did note that recovery in the labor market is likely to be quite slow even when the economy is growing 3 or 4% annually.

It will be interesting to see what more of the influential analysts and economists have to say about the potential for a flattening out of the economy shortly after the initial rebound. The bottom line is that the economy appears to be in recovery mode for now, but opinions differ as to whether this recovery will last into next year. Additionally, don’t expect jobs to abundant anytime soon, since the labor market will likely be the last to improve.