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To: Sarmad Y. Hermiz who wrote (63963)	6/22/1999 9:57:00 PM
From: GST	Respond to of 164685

Sarmad -- Long as can be. Going higher. Brokerages will rebound. Nets are getting into oversupply but will move up against this headwind. Bummer that there are so many IPOs this week. That hurt the market today.

To: Sarmad Y. Hermiz who wrote (63963)	6/23/1999 4:22:00 AM
From: GST	Respond to of 164685

Wednesday June 23, 4:00 am Eastern Time Fed to raise interest rates 3/4 a point - forecast By Michael Kahn SAN FRANCISCO, June 23 (Reuters) - The U.S. Federal Reserve will raise interest rates three-quarters of a percentage point over the next six months to check a growing risk of inflation threatening the booming U.S. economy, according to a forecast released on Wednesday. The widely watched quarterly report, issued by economists at the Anderson School at the University of California, Los Angeles, noted this would fully reverse the rate cuts implemented last fall and bring about a so-called soft landing to the current eight-year U.S. economic expansion. ''...A soft landing will be achieved by the Fed, making this the longest expansion in U.S. history,'' the report said. With little chance of any pullback in the torrid pace of consumer spending or a loosening in tight labor markets, Federal Reserve Chairman Alan Greenspan and the Fed need to act soon, the report said. The report warned that Fed policy-makers could not expect another Asian currency crisis or a continued strong dollar to keep import prices low and inflation in check. ''The fortuitous reoccurrence of these types of events is not something the (Federal Open Market Committee) can bank upon to keep inflation at bay,'' the report said. The Fed's policy-making Federal Open Market Committee meets June 29-30 to discuss interest rates, and, after comments Greenspan made to Congress earlier this month, the central bank is widely expected to raise short-term rates by a quarter point. ''When we can be preemptive, we should be, because modest preemptive actions can obviate the need of more drastic actions at a later date that could destabilize the economy,'' Greenspan told the Joint Economic Committee of Congress June 17 in a major expose about the U.S. economy and monetary policy. Rajeev Dhawan, who co-wrote the report, said Greenspan's statements have pushed the Fed beyond the point of no return for raising interest rates. But unlike many on Wall Street, he predicted the central bank would keep going because one rate hike won't do the job of slowing down the red-hot U.S. economy. ''Yes the interest rates are going up,'' he said in an interview. ''Wall Street may be thinking only 25 basis points and they think that's the end -- but that is not the end. There's going to be two more increases of 25 basis points after that.'' The UCLA report said after the Fed acts, consumption will slow from its 4.6 percent pace in 1999 to 2.7 percent in the year 2000. The rate rises will also slow U.S. Gross Domestic Product (GDP) growth to 2.3 percent in 2000 from an expected 3.8 percent in 1999. Real GDP grew by 3.9 percent in 1998. Inflation also was expected to creep up again in the coming few months and could pose serious problems if the Fed doesn't act accordingly, Dhawan. The core inflation rate, measured as the consumer price index minus food and fuel, was estimated at 2.1 percent in 1999, 3.2 percent in 2000 and 2.5 percent in 2001. ''If it doesn't do the rate hike it's going to be a serious problem,'' he said. ''If you do it now inflation won't become a wildfire ... it can be contained.'' The report pegged the U.S. unemployment rate at 4.3 percent in 1999, 4.9 percent in 2000 and 5.1 percent in 2001.