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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: JDN who wrote (75127)	1/5/2000 9:36:00 AM
From: MeDroogies	Read Replies (1) \| Respond to of 97611

1st - I'm on your side. I don't see inflation. HOWEVER, the Fed likes to act BEFORE inflation is a problem. Greenspan used to use (he may still) a formula called P-star to determine future inflation. If he does, it may be indicating a speeding up of inflationary pressure. From what? Non-Accelerating Inflation Rate of Unemployment. This is typically 5.5 -6%. With unemployment at 4%, it is likely we COULD see wage-push inflation. However, with stock options/booming market/increased productivity, the dynamic is considerably different today than it was 10 years ago. Still, it's a question. Nobody can find good people to hire, and they have to hire mediocre people at ridiculously high wages (I know...it affects our decisions here). This could have a knock-on effect in 5-6 months. So, raising rates may not be a bad thing. In the past, the market has positively absorbed rate increases...no reason to think it won't again, over time.