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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (1339)	4/26/2000 6:00:00 PM
From: John Pitera	Respond to of 33421

----St. Louis Federal Reserve Bank President William Poole said Tuesday that he is pushing hard to do what he can to keep inflation under control, and the >b>Fed must not be deflected from its main mission of pursuing price stability. Poole also said the long US economic expansion shows no sign of old age. Poole was speaking in Honolulu to the Hawaii Council on Economic Education. He is not a voter this year on Fed policy, but is outspoken on economic issues. As a regional Fed president, Poole of course attends the Federal Open Market Committee meetings and takes part in the economic discussions leading to a policy vote. The Fed is widely expected to raise short-term US interest rates another quarter-point when the FOMC next meets May 16. Emphasizing the economic value of keeping the Fed's monetary policy aimed at low and stable US inflation, or price stability, Poole said that "today, despite an economic expansion of record length, we see no signs that the expansion is closing in on old age." But he also warned that "if inflation gets away from the Fed to any significant degree-and I am pushing with every bone in my body to do what I can to make sure that circumstance does not face us-then the dangers of recession will surely rise." Poole noted that when prices have been stable for an extended period people take that stability for granted. He observed that "people often insist that the Fed ought to pursue other objectives, such as reducing the unemployment rate, stabilizing the foreign exchange rate or nudging the stock market up or down." However, he insisted that the Fed "must not allow its primary mission of achieving price stability to be deflected by attempting to pursue other goals." Poole added that "all of us want the unemployment rate to settle at as low a level as possible, and we want the stock market to be priced correctly, and we want the foreign exchange rate to settle at an appropriate level. But the Fed simply does not have policy instruments to achieve all of these goals and must instead concentrate on...maintaining low and stable inflation."------