Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Justa Werkenstiff who wrote (10063)	11/23/1999 8:38:00 PM
From: Justa Werkenstiff	Respond to of 15132

INTERVIEW-Fed wants to be better communicator By Victoria Thieberger SYDNEY, Nov 24 (Reuters) - U.S. Federal Reserve Bank of Cleveland President Jerry Jordan said on Wednesday the Fed is considering different options in the way it announces policy decisions and could make an announcement in the next few weeks. The Fed earlier this year decided to disclose any shift in its policy bias, or its view on the likely direction of future rate moves, after its policy-setting meetings. But the news sometimes added to the confusion in financial markets about the Fed's intentions. Asked whether the Fed was reconsidering the bias announcement, Jordan replied: "We're currently working on trying to improve the quality of our communication and we'll maybe have something to say about that in a few weeks." In an interview with Reuters, the visiting Fed president said no decision had been made on whether any change would be announced before the next Federal Open Market Committee meeting on December 21, or left till early next year. "This time round our emphasis is on getting it right and improving the quality of our communication rather than on the urgency of getting something done by a certain date." The bias is a grey area in monetary policy that indicates whether the Fed is leaning toward tightening or easing credit. The Fed is understood to be looking at ways to more clearly express its policy intentions. Jordan is a non-voting member of the Federal Open Market Committee, which last week raised the key federal funds rate for the third time this year to 5.50 percent. It also raised the discount rate to 5.0 percent from 4.75 percent. And the Fed shifted its policy bias from tightening to neutral, indicating it does not expect to move again any time soon. OIL PRICES JUMP Jordan also said it was too early to tell whether the recent sharp rise in oil prices would have an impact on inflation in the U.S. He said he had read the opposing arguments that the spike in oil prices was either temporary or a sustainable trend. "But it's all rather recent and I think we have to wait and see." Still, higher petrol prices could dampen spending in other areas. Worries about demand in the U.S. economy outstripping supply were a major factor behind the Fed's decision last week to raise rates, according to another Fed President, William McDonough of the New York Fed. "It's certainly the case that if a household has to pay more to fill up the tank, there's less money left over to spend on other things and you get less price pressure elsewhere," Jordan said. Crude oil prices rose above US$27 a barrel earlier this week, the highest since the Gulf War in 1991, due to Iraq's surprise weekend decision to halt oil shipments linked to the oil-for-food programme. Crude oil futures on the New York Mercantile Exchange fell on Tuesday, however, as Iraq indicated its position was negotiable. Jordan is due to deliver a dinner speech in Sydney on Wednesday entitled "The End of Chaos? Global Markets in the Information Era." He said the economies of most of the Asian crisis nations appeared to be on a positive trend, and noted most expectations are that growth next year will be better than this year. "But no one knows for certain about the pace of recovery and expansion in Japan, and they still have very, very considerable challenges in the banking system." He said the pace of reform in the recovering nations was subject to the normal "ebb and flow" of change. "But the frequency of what are labeled 'crises' in the 1990s is indicative that the breaking down of old arrangements is happening quicker than before. "It does become a question then of how rapidly a country is able to institutionalise better ways of doing things," Jordan said.