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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (30884)	3/14/2000 9:23:00 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

Few months back I raised the possibility of three hikes remaining, I also talked about the break down of relationship between interest rates and corporate profits like the break down of Phillip curve we highlighted very early on in 1997 or 'winner takes it all' strategy, it is always to look back to see if we can read the future right. the little we can helps me to say that our read will not deviate too much from the market direction.. nice to have seen this today..after retail sales figures.. The personal consumption expenditure index, which the Federal Reserve uses to make its baseline inflation forecasts, rose at a 2.5 percent rate. In its most recent monetary report to Congress, released last month, the Fed forecast the PCE index would increase between 1.75 percent and 2 percent this year. Such growth has the Fed's policy panel -- the Federal Open Market Committee -- on alert. ``The full benefits of innovative productivity acceleration are at risk of being undermined by financial and economic instability' caused by an excess of demand over supply, Federal Reserve Chairman Alan Greenspan said in a speech to a conference on the ``New Economy' at Boston College last week. The solution is for market interest rates -- pushed higher by a ``vigilant' Fed -- to bring consumer and business demand into alignment with the economy's ability to produce goods and service, he said. The FOMC has raised the overnight bank lending rate four times since June 30 in an effort to cool the economy and head off potential inflation threats. Most analysts expect three more rate increases this year, which would drive the federal funds target to 6 1/2 percent from 4.75 percent in the first half of 1999.