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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (9075)	10/4/1999 1:53:00 PM
From: Wally Mastroly	Read Replies (1) \| Respond to of 15132

Sur-vey Says! Fed not act now - but econs. expect a rate rise in months ahead: An overwhelming majority of economists polled for USA TODAY's quarterly economic survey believe the Federal Reserve Board won't raise short-term interest rates this week. The Fed's Open Market Committee convenes Tuesday in Washington. Thirty-eight of 45 top economists surveyed by USA TODAY believe Fed policymakers will leave the federal funds rate - the rate banks charge each other for overnight loans - at 5.25%. Only seven believe the Fed will raise rates. None expects the Fed to cut rates. The survey was conducted by fax Sept. 23-28. To keep inflation in check, the Fed raised the federal funds rate twice this summer. Each time, policymakers nudged the rate up one quarter of a percentage point. At its last meeting, in August, the Fed also boosted the discount rate, the rate it charges banks for overnight loans, by a quarter point, to 4.75%. Still, inflation remains a major concern. In fact, 18 of the economists surveyed believe the Fed will adopt a "tightening" stance regarding future actions, meaning it is leaning toward raising rates. Currently, the Fed's stance on future interest rate moves is neutral. Gregory Jones, chief economist at Briefing.com, says some signs of inflation are starting to appear. The National Association of Purchasing Management's index of manufacturing, released Friday, showed strong growth in orders and production in September. "The NAPM report makes me think the Fed will lean toward tightening," Jones says. Inflation also may spike in coming months because of rising wages, says Rosanne Cahn, an economist with Credit Suisse First Boston. That could stir up stock and bond markets. Cahn says the yield on 30-year Treasury bonds could climb sharply above 6.25%, from 6.13% Friday. The Standard & Poor's 500 stock index could fall an additional 5%. It's down 9.6% since peaking in mid-July. Due mainly to inflation concerns, 36 survey participants say the Fed's next move after Tuesday's meeting will be to raise rates. Of those, 20 expect the rate increase in 1999. And 16 say it will come in the first half of 2000. usatoday.com - EDIT/UPDATE: And the bloomberg survey: quote.bloomberg.com