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To: Lizzie Tudor who wrote (11060)	8/10/1999 8:54:00 PM
From: S.C. Barnard	Respond to of 28311

Michelle: after reading this news, the author of my last post changed his opinion to a rally here, but we drop again at the announcement of a 25pt rate hike...yes going crazy now!!! ---------------------------------------------- NEW YORK, Aug 10 (Reuters) - Federal Reserve Bank of Dallas President Robert McTeer said on Tuesday strong growth need not be inflationary as shown by the U.S. Consumer Price Index (CPI), which was reported unchanged for two consecutive months since the Fed last met in June. ''I can't second-guess the markets. But strong real growth by itself is not necessarily inflationary, especially if it is supply-side growth fueled by technology, productivity,' McTeer told reporters when asked if he thought that U.S. financial markets, pressured by interest rate jitters in recent sessions, were overreacting. McTeer this year is a voting member of the Federal Open Market Committee (FOMC) that raised the federal funds rate for overnight inter-bank lending by one quarter-point to 5.0 percent when it last met on June 30. The FOMC will convene again on August 24 amid market expectations of another quarter-point funds rate hike largely fueled by rising wage pressures. "If you are worried about inflation, the most important statistics to look at are the statistics on inflation... ''Since our last meeting, you may have noticed that the CPI increased zero (percent) and zero (percent),' McTeer said, referring to the CPI that was reported unchanged in both May and June after a worrisome spike in April. ''It's not likely that can continue, but we have already seen that strong growth does not necessarily lead to higher inflation,' McTeer also told reporters after addressing an economic forum in Dallas. The July CPI is due out on August 17th and is expected to be up 0.3 percent. ''The others (economic statistics) give you some information, but they don't give you the complete information,' McTeer said of inflation gauges as guides for monetary policy.