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To: Haim R. Branisteanu who wrote (52959)	6/3/2000 8:25:00 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 99985

ECB Likely to Raise Benchmark Rates as Inflation Risk Grows By Hellmuth Tromm Frankfurt, June 3 (Bloomberg) -- The European Central Bank will probably raise interest rates Thursday, the fifth increase in seven months, as recovering economies and the decline of the euro against the dollar threaten to push up inflation. All 21 economists surveyed by Bloomberg News predicted the ECB will boost its benchmark lending rate, the amount it charges commercial banks for two-week loans. Eighteen forecast a quarter- point increase, to 4 percent. Three expect a half-point gain. ECB officials, who set rates based on expectations for inflation a year or more in the future, have said they're concerned that faster economic growth and the euro's slide, which boosts the cost of imports, will prompt companies to raise prices. The region's money supply, a gauge of inflationary trends that the ECB tracks, expanded at a record pace in April. ``There's a growing need for action'' by the ECB, said Otmar Lang, an economist at Deutsche Bank Global Markets Research. ECB policy-makers have hinted that another increase in borrowing costs is coming. The central bank will be ``vigilant to ensure that growth is sustainable and non-inflationary,'' said Jean-Claude Trichet, head of the Bank of France and a member of the ECB's rate-setting panel. Otmar Issing, the ECB chief economist, said the weak euro ``holds the danger of imported inflation.'' Pressure on the ECB to keep raising interest rates may have been lessened by Friday's U.S. employment report. An unexpected increase in the jobless rate, to 4.1 percent in May from 3.9 percent in April, prompted investors to scale back expectations for higher rates from the Federal Reserve. That could mean fewer increases will be needed in Europe as well, economists said. bloomberg.com

To: Haim R. Branisteanu who wrote (52959)	6/3/2000 8:31:00 AM
From: Techplayer	Read Replies (1) \| Respond to of 99985

Haim, I understood your point. Food prices in my area have not risen. Meat actually costs less than it did 2 years ago for the most part. Gas is the only rising indicator that I personally have experienced and the US cannot control its' pricing. This cost will be passed onto the consumer. where I have difficulty is watching the Fed raise rates to control pricing on an issue outside of our control. Now let me ask you this. If the fed raises rates and spending is decreased, doesn't that have an adverse effect on pricing since volume typically allows for better pricing? tp