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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 (10568)	12/20/1999 11:40:00 AM
From: Hank Stamper	Read Replies (1) \| Respond to of 15132

I reckon the Fed will stick to bumping rates in 1/4 point increments. First, Greenspan has been clear that the Fed responds to inflation and not specific market levels. (Yes, he said, the latter may be linked to inflation but "inflation" is still what he is out to control and not the market levels.) Second, the recent rate of inflation is not that strong--i.e., it's a sort of 1/4 point type of inflation not the type that calls for a 1/2 point increase. Greenspan has shown in the past that he likes to act gradually. I think all Greenspan has to do is continue slowing money supply growth and make a series of 1/4 point increases until there is a noticeable slowing of the economy. The questions are: how many such increases will be needed? How long will it take before the speculation in the markets is dampened? Will the Fed actions cause a recession or mini-recession, or, will we get the hoped-for "soft landing"? Ciao, David Todtman