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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (18830)	6/30/1999 9:41:00 AM
From: Les H	Respond to of 99985

FOMC SURVEY: 1/4% CERTAIN; BIAS TO HOLD; MANY SEE 2ND HIKE AUG 14:07 EDT 06/29 By Nikki Baldwin bonds-online.com NEW YORK (MktNews) - Fedwatchers at U.S. primary dealers uniformly expect the Federal Reserve to raise the federal funds target 25 basis points to 5% at Tuesday's and Wednesday's meeting. Citing a continuation of strong economic growth, 14 of the 25 respondents said there will be a second 25 basis point hike in August. Five others feel a hike in June will be the first and last for this year. Chief reasons for the expected incremental hike in June center on strong economic growth, strength in emerging markets, and the need to take back some of the liquidity from last fall. The majority, 18 of 25 respondents, feel the Fed will keep its tightening bias in June, although a few said a shift to a neutral bias is possible. Many feel the Fed will leave the bias alone based on Fed Chairman Alan Greenspan's comments before the June 17 Joint Economic Committee where he stressed the benefits of pre-emptive incremental actions. In the minority, three Fedwatchers feel that the Fed will shift to a neutral directive due mainly to the absence of significant inflation. They also cited the Fed's pattern between 1994-7 of shifting to a neutral bias after raising rates. Despite the Fed's recent openness, two Fedwatchers feel the FOMC will not announce any bias change. "The Fed does not have to announce what they are going to do," said Martin Mauro of Merrill Lynch. Most said the discount rate will not be significant this meeting.