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To: Rarebird who wrote (39125)	8/17/1999 4:12:00 AM
From: Alex	Respond to of 116898

Bridge Alert: EU Debt: US Press: Fed on Lookout for Mkt Bubble <Picture> Aug. 17-MAR-- [B] BRIDGE ALERT: EU DEBT: US Press: Fed on lookout for mkt bubble London--0721 GMT--Aug 17 Tel: +44-171-842-4272 The Fed will be ever vigilant for signs that a US asset market bubble is developing, writes John M Berry in today's Washington Post (internet edition). However, following Greenspan's 1996 'irrational exuberance' speech, he and fellow Fed policymakers have concluded that whatever the level of stock prices (the Dow has almost doubled in pts terms since then), there is no way to be sure whether there is a mkt bubble. And if the Fed can't tell, it can't do anything directly about it till the bubble bursts, argues Berry. As Greenspan said in his Humphrey-Hawkins testimony last month, "the central bank cannot effectively directly target stock or other asset prices." All it can do is "mitigate at least part of the impact on the economy when the inevitable correction occurs" through appropriate monetary policy steps. Bridge News The Bridge ID for this story is YYKVSG (c) Copyright 1999 FWN futuresource.com