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To: Gut Trader who wrote (17470)	5/3/2000 10:56:00 PM
From: Jim Willie CB	Respond to of 35685

1994-95 is not a good teacher for today the US economy was moribund for two years we were emerging from the GulfWar and $30 oil Bush suffered thru a recession he could not even see interest rates were set absurdly low for stimulative purposes FedFunds began the rise at something like 3.0% the stimulation worked, and had to be toned down in 1999, we began with 4.75% five hikes later, we stand at 6.0% FedFunds rate we need fine tuning now, not a shunting of money supply historically, FedFunds rate is set to be about 2.5% above prevailing rate of inflation suppose inflation rises and stabilizes at 4.0 to 4.5% this year (I dont think that is AT ALL realistic) then 7.0% would be upper limit for FedFunds targeting but 6.5% is more likely the upper limit I think political forces will enter the picture with Election Season taking over a "wait & see" policy would be very prudent, to allow the past few hikes to work their way in, while at the same time, the Y2K effect can get behind us I say Greinstein will say friendly things tomorrow to the stock market / Jim