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To: Juli who wrote (6141)	5/21/2000 12:00:00 PM
From: James Strauss	Read Replies (2) \| Respond to of 13094

Juli: I agree that the first 4 rate hikes were necessary, and possibly the 5th... But a 1/2% rate hike now with tame inflation numbers and weakening economic numbers suggests other influences on the FED... Housing permits declined for the first time in a while... This means less demand for lumber, concrete, copper, appliances, and labor... And, all the monies that would have been earned by workers and companies in all these industries are lost to the economy... Add another one or two rate hikes on top of this and watch the mortgage market slow down... With inflation running at 2% to 3% annually, real interest rates should only be about 2% higher (4% to 5%)... We already have greater than a 3% spread... Any more gifts by the FED could hasten Deflation and Recession... Jim