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To: RDR who wrote (3939)	7/22/1999 12:50:00 PM
From: Dealer	Respond to of 5843

Greenspan Says U.S. May Be Growing Too Fast, Rates Could Get Another Boost By Michael McKee Greenspan Says U.S. Economy May Be Expanding Too Fast (Update1) (Adds markets in paragraph 6) Washington, July 22 (Bloomberg) -- The U.S. economy may be growing too quickly and could force the Federal Reserve to raise interest rates again if there are signs inflation is likely to accelerate, Fed Chairman Alan Greenspan said. Unless job creation slows and productivity increases continue to accelerate, the Fed is poised to act preemptively to raise interest rates before inflation picks up, Greenspan said in the text of his twice-yearly Humphrey-Hawkins testimony on the economy and Fed policy. ''If new data suggest it is likely that the pace of cost and price increases will be picking up, the Federal Reserve will have to act promptly and forcefully so as to preclude imbalances from arising that would only require a more disruptive adjustment later,'' he told the House Banking Committee. Greenspan didn't specifically signal that the Fed would raise the overnight bank loan rate at its next meeting on Aug. 24. Still, the tone of his 16-page prepared text included more warnings than many analysts were expecting about the need to follow a June quarter-point increase with another ''preemptive'' attack on inflation. He said some Fed policy-makers didn't think the June increase was enough to bring inflation risks into balance. He also warned of a possible ''euphoric'' rise in stocks fueling increased consumer spending. ''When we can be preemptive, we should be,'' he said. Stocks and bonds fell after details of Greenspan's testimony were released. The Treasury's benchmark 30-year bond fell 27/32 point, pushing up its yield 7 basis points to 5.97 percent. The Dow Jones Industrial Average immediately fell about 60 points before turning around again. For the day, the Dow fell 18 points or 0.2 percent. 12:45 Thursday.....He is on now!