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To: bobby beara who wrote (44479)	3/30/2000 10:30:00 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 99985

Thursday March 30 3:25 PM ET Fed Will Raise Rates Until Growth Slows By Marjorie Olster WASHINGTON (Reuters) - Federal Reserve officials, detecting palpable strains from the searing pace of U.S. growth, made clear on Thursday they will keep raising interest rates until the economy cools off. Comments from Federal Reserve Chairman Alan Greenspan and two regional Fed presidents showed that not only does the central bank see virtually no signs its five rate hikes since mid-1999 have slowed demand, but the risks to the economy may actually be mounting. ``As a central banker...I cannot help but register concerns about some recent developments,' New York Fed President William McDonough said at an appearance in Tokyo. ``As the expansion has progressed, signs of imbalance or strain have begun to appear in the U.S. economy, especially in relation to the world economy,' he said. McDonough told the Japan Centre for Economic Research the Fed would continue to raise rates until consumer demand slowed and consumer confidence became a bit less ``euphoric'. ``We are tightening monetary policy, with interest rates going slowly up, and we have made it very clear that we will continue that policy until we are successful in achieving our goals.' As if to punctuate the Fed's concerns about economic overheating, the government revised up its gross domestic product growth estimate for the fourth quarter of 1999 to a blazing 7.3 percent annual pace. It was the strongest growth in nearly 16 years. Wall Street is already bracing for up to four quarter percentage point rate hikes in the next 10 months, but the real question in the minds of Fed-watchers is whether the Fed will soon shift from such gradual steps to more aggressive ones. The minutes of the February meeting of the rate-setting Federal Open Market Committee (FOMC), which were released last week, showed that a few members were already pressing for a more drastic half-point increase at that time. The FOMC opted in February for a quarter-point rate rise but the minutes said some members knew they may have to start raising rates by larger increments later in the year. At the March meeting, where the FOMC raised rates again by a quarter point, the committee said economic conditions were essentially the same as when it met in February -- in other words, there was no tangible evidence of a slowdown. Greenspan Warns In a letter to lawmakers released on Thursday, Greenspan repeated earlier warnings that the economy looked like it might be out of balance because of strong growth, and that out-sized stock gains were responsible for much of the problem. ``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 to Congress. ``The sharp increase in equity valuation appears to have been an important factor behind an apparently developing imbalance,' he added in the letter dated March 29. Chicago Fed President Michael Moskow said at a separate appearance on Thursday that he believed the Fed's incremental policy had been appropriate until now. But he kept open the option of abandoning that approach in the future. ``I don't want to predict, or event hint, that I am predicting what we are going to be doing in the future,' Moskow said at a breakfast meeting in Chicago. ``The Federal Reserve is constantly reassessing the situation.' Moskow, currently a non-voting member on the FOMC, said the Fed was raising rates because the pace of demand growth was not sustainable in the long run without higher inflation. ``That's why the Fed...has taken the actions that we've taken in recent months to slow down the growth of aggregate demand in this economy because we think it is growing at a rate that is not sustainable,' he said. Moskow said average annual growth around 4.5 percent in the past few years was too strong and would eventually spark inflation. McDonough cited rising commodity prices due to strengthening global growth, strong consumer demand and an ever-worsening current account deficit as concerns. He said he did not think the U.S. had a ``bubble economy' though. And he lamented that the United States was the only major world economy showing vigorous growth. ``The United States cannot indefinitely be the engine of growth for the world economy -- the importer of first and last resort -- and sustain ever-mounting current account deficits without running the very real risk of economic and financial difficulties that could well weigh on many of the world's economies. No one wants that,' he said.

To: bobby beara who wrote (44479)	3/30/2000 10:56:00 PM
From: Saulamanca	Respond to of 99985

Bobby, Looking over some charts tonight the only things that look good are some oils and retailers. The Naz can hold up without the biotechs but needs the chips to to rebound. Techs really got whacked. The last time JDSU closed below it`s 50dma was 10/15/98 @ $5.68. Studying my ABC`s, Jim