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

To: Benkea who wrote (27573)	9/28/1999 9:43:00 AM
From: Lee Lichterman III	Respond to of 99985

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. I am late for work so I need to quit posting and go but although I expect a bounce, this market looks too sick to bet on long. To each thier own. If you and the net buyers want to go long, that is what makes a market but with gold back up over 300 an ounce, inflation fears abounding, AG watches gold closely as he believes it is an early inflation indicator, rising oil etc, the banks, insurance stocks are getting hammered, sector rotation is looking for value not Mo Mo all are serious warning shots across the bow if you ask me. If we didn't have a OMC meeting in a week, I beleieve we would be down another 500 points by now. Even if AG doesn't raise, all it will take is a stearn we are biased to raise and are watching close warning and this market is going to be hurting October 6th. I personally would be selling each and every bounce, not buying. Good Luck, Lee