WASHINGTON (MktNews) - The following are excerpts of Federal Reserve Chairman Alan Greenspan's remarks on inflation, in response to a question posed during his testimony Wednesday morning to the Senate Banking Committee:

GREENSPAN: "We do know as the rate of growth has slowed down unit labor costs have gone up as they invariably do in such a period. But we've seen no evidence those costs are being passed through to final prices in any material way."

GREENSPAN: "We've tried to trace the movement of energy costs into prices. We've find that almost all does not go into final goods prices but is squeezing profit margins, which is the same thing as unit labor costs. Inflation indexes, that is, total consumer inflation less what we see perceive to be the volatile parts of food and energy, that so called core inflation, has been relatively stable and shown no evidence of it. But having said that I would suggest to you as I always do say, we have to be very careful about any evidences of emerging inflationary instability because history has told us time and time again that the most effectively productive economies are those with stable prices. And we certainly hope to be able to see sufficiently far in advance to fend off any emergence of inflationary forces."