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To: Rarebird who wrote (41239)	9/28/1999 9:14:00 AM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 116764

FedReservePres MMoskow "concerned about wage inflation" msnbc.com CHICAGO, Sept. 27 ? Chicago Federal Reserve President Michael Moskow didn?t answer the crucial $60,000 question in an exclusive interview with CNBC Monday. He declined to comment on what the central bank will do next week at the meeting of the Fed?s policy arm. But the monetary official did offer a few cryptic comments about the Fed?s recent moves. MOSKOW SAID the Fed has a long timeframe when it looks at the impact of its interest rate decisions. ?I think it?s important to keep in mind that we reduced interest rates by 75 basis points last fall. So in effect now what we?ve done is we?ve increased [short-term interest rates] by 50 basis points, and it takes quite a while for monetary policy to have an impact ? 6-9 months to a year. It?s a significant lag,? Moskow told CNBC. So what is he saying? His comments may be a hint that one of the reasons he remains unconcerned about inflation is that we have yet to see the dampening impact of the two rate hikes the Fed has made so far. He didn?t spell it out, but his statement certainly raises that question. Moskow also discussed a range of other topics. He said he expects the economy to grow at 3.5 percent this year. His earlier forecast was 2.5 percent. He is also concerned about wage inflation in his own district. ?We do see selected shortages of certain categories of employees, and I believe that some plants are not locating here because of our shortage of employees. But up to this point we haven?t seen that shortage translate into significantly higher increases in wages and compensation,? he said.