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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (274)	6/29/1999 4:19:00 PM
From: Nemer	Respond to of 19219

JT -- You forgot Andrea Mitchell ... totally unfounded and baseless rumour has it she's in favor of 1/2 Usual disclaimers apply .... Nemer

To: J.T. who wrote (274)	6/29/1999 4:32:00 PM
From: pater tenebrarum	Respond to of 19219

J.T., i guess the most likely outcome is a 1/4 point hike and a continued bias toward tightening. AG seems determined to slow the economy down, and the only way to do that is to bring the stock market down. i'm also an adherent of the theory that the Fed will have to act before Y2K concerns become too great. as AG has said, 'the economy is stretched in a number of dimensions'. and you are right that the Fed sans Rivlin looks a lot more vigilant. the exuberant optimism displayed in the market right now is hard to justify under such circumstances. had the market been nervous and weak ahead of the FOMC i would have been inclined to look for a relief rally thereafter. but as things stand right now, there seems to be no worry at all; all you hear is what the market is supposed to have 'priced in' already. the strongest argument in favor of the bulls is the oversold condition of the bond market, and the historical evidence that suggests that a first rate hike does not necessarily stop a bull market in it's tracks. i have been looking for a blow-off to come for quite some time and i will not exclude the possibility that we get one. however, a blow-off phase usually starts when optimism is at a low ebb and most people look for a correction or a bear market. regards, hb

To: J.T. who wrote (274)	6/29/1999 9:57:00 PM
From: J.T.	Respond to of 19219

WRONG! Inflation Hawks Poole, Guynn and Broaddus have no vote in FOMC meetings now, but can make recommendations to voting members. The current 10 Voting Members are: 5 Board of Governors (7 members, 2 seats vacant): Greenspan-Chairman Meyer Ferguson Gramlich Kelley Federal Reserve Banks (12 Fed banks, N.Y. permanent vote, others 1 year rotating term): McDonough-Vice Chair (N.Y.) Boehne-(Phil) Moskow-(Chicago) Stern-(Minneapolis) McTeer-(Dallas) Of these 10 voting members, I only see Moskow, Kelley and Ferguson voting for 1/2 point increase. I thought the real hawks like Poole, Guynn and Broddaus had votes but after little sleuthing found this not to be the case. The bottom line is this, there is not enough damaging economic information for members to justify the 1/2 point increase. They will take wait and see attitude for #'s later Thurs and Fri as well as next two CPI and PPI reports before AUG 24 FOMC meeting. I believe this will be too late and better to do it 1/2 now and maybe incremental 1/4 in Aug and be done with it. Fed's viewpoint is Inflation is still under control. Commodity prices are relatively tame. To counter this argument, asset inflation is a concern as is the tight labor market and decreasing available pool of skilled labor. Also, the housing market has created additional wealth effect which is spotlighted lately. But because of imperfect information and gradualist approach, I only see 1/4 raise with ^^^ continued bias. If this occurs, I think the bond market sells off (they want 1/2 and be done)and stocks sell-off to 10,595 before bouncing. The market simply doesn't want the guillotine hanging over its head for another two months.The alternate view is that market just wants to move higher because of impending earnings season which is looking real strong aka Queen Abby. Thurs and Friday numbers will dictate if we run to orbittal nirvana heavens. Best, J.T.