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To: Steeny who wrote (23697)	6/23/1999 12:22:00 AM
From: Tunica Albuginea	Respond to of 41369

Steeny, Fed Reserve Bank of New York Pres W.McDonough : Fed FOCUS-McDonough says Fed focus on price stability Reuters Story - June 22, 1999 22:55 By Isabelle Clary NEW YORK, June 22 (Reuters) - Federal Reserve Bank of New York President William McDonough on Tuesday cited inflation as the main threat to the booming U.S. expansion, but said the Fed is focusing on its long-term goal of stable prices and healthy growth. "Now we are back to what is our simple goal ... of sustainable growth and price stability," McDonough told the Money Marketeers of New York University, a group of Wall Street economists and market participants who presented him with their Distinguished Achievement Award for 1999. McDonough spoke just one week before the Fed's policy-making arm, the Federal Open Market Committee (FOMC), meets on June 29-30. Most Wall Street analysts expect the Fed to raise the federal funds rate which governs overnight inter-bank lending by a quarter point to 5.0 percent at that meeting. Analysts have provided two rationales for what would justify the first U.S. rate increase since March 1997 -- fears that U.S. inflation is on the rise, and the need to undo at least some of three rate cuts that helped shield the U.S economy last fall from a global financial crisis. "At this point, the issue is the potential for inflation which, if allowed to break out, is destructive to the economy," McDonough told the packed gathering. "I think you can count on the Federal Reserve to pursue a monetary policy that permits sustainable economic growth ... through price stability," he added. While the Fed has well prepared financial markets for a small rate hike in late June, it has not given many clues about its monetary policy outlook beyond the upcoming Fed meeting. marketwatch.newsalert.com Cn28kqb8ZtJiYnZy3ntu0&FQ=v%25reuter&Title=Headlines+for:+v%25reuter+