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To: Wally Mastroly who wrote (12890)	3/30/2000 2:51:00 PM
From: J. M. Blackburn	Respond to of 15132

More on Greenspan: Greenspan sees stock values contributing to imbalances WASHINGTON, March 30 (Reuters) - Federal Reserve Chairman Alan Greenspan told Congress in a letter, released on Thursday, that the central bank was concerned about supply-demand imbalances in the economy, and that stock valuations seem to have been a big factor in the developing imbalance. ``The Federal Reserve is concerned about imbalances between aggregate demand and supply and the implications for inflation and thus sustainability of the expansion,' Greenspan said in a letter answering questions which arose during his Feb. 17 Humphrey-Hawkins testimony. ``The sharp increase in equity valuation appears to have been an important factor behind an apparently developing imbalance,' he added. Referring to the rising use of margin borrowing to buy stocks, Greenspan said that ``lenders and borrowers need to assess carefully the risks they are assuming through the use of margin.' Greenspan also said he does not believe the Fed's short-term monetary policy has ``a significant effect on stock prices.' biz.yahoo.com