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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (44772)	12/6/2000 7:55:10 PM
From: Box-By-The-Riviera™	Read Replies (2) \| Respond to of 436258

haven't the japanese been putting this kind of crap out for the last ten years or so....... got bi-lingual dictionary???????? Wednesday December 6 3:58 PM ET Fed Leaders See Risks Balanced By Andrew Priest NEW YORK (Reuters) - A clutch of Federal Reserve officials said on Wednesday that signs of the U.S. economy's slowdown were becoming more evident but the chances of this evolving into a recession were highly unlikely. Their comments came a day after Federal Reserve Chairman Alan Greenspan (news - web sites) said the powerful U.S. central bank had to be alert to the risks of a sharp economic slowdown as inflation was no longer the prime threat to the decade-long economic expansion. Greenspan's comments were interpreted by financial markets as signaling the Fed may soon contemplate interest rate cuts and sparked substantial bond and stock market gains with the bruised Nasdaq Composite index spiraling up more than 10 percent in its best one-day performance ever. But comments by top Fed leaders on Wednesday seemed aimed at reining in the more euphoric market reaction to Greenspan's comments as officials stressed the economy was moving into balance, indicating that while a cycle of interest rate tightening may be at an end, rate cuts could be some way off. Fed Vice Chairman Roger Ferguson, speaking before the Rochester Institute of Technology, said the U.S. central bank must be equally alert to the risk of an excessive slowdown and to that of an economic overheating, signaling the Fed has moved to a balanced view of economic risks. ``We must be equally vigilant against the risk of either an extended period of growth unacceptably below potential, or a resurgence of inflation,'' Ferguson said. Ferguson listed the key risks to the nation's record expansion as a possible overreaction in financial markets to signs of economic slowing, a sharp reversal of capital flows into the U.S. economy, a slowdown in productivity growth and a drop-off in investment. Federal Reserve Governor Edward Gramlich said signs of a slowdown had become more visible in the last few weeks and credit conditions had tightened. Gramlich told reporters after a speech to a conference in Philadelphia that he continues to see signs that the U.S. economy is decelerating, a condition he and the Fed have observed repeatedly since mid-November. ``In the November (FOMC) statement, we had already noticed that credit conditions were tightening and there were signs of a slowdown ... In the last few weeks signs of a slowdown have become more visible,'' Gramlich told reporters. Federal Reserve Bank of Chicago President Michael Moskow reiterated comments he made on Tuesday that while the economy was in a transition mode the chances of the slowdown evolving into a hard landing were highly unlikely. Asked in an online interview with WebFN whether he thought the economy was headed for recession, Moskow said: ``Obviously, you never say never about anything when you're forecasting, but I think it's highly unlikely.'' Fed policymakers next meet Dec 19 and a shift to a more neutral policy stance is seen as the necessary precursor to cutting interest rates. Most primary dealers -- the prestigious firms that deal directly with the Fed in money markets -- see interest rates falling in the first half of next year, a Reuters poll on Tuesday showed. The poll showed that 17 of 25 primary dealers contacted expected the Fed to cut rates at least once in the first half of 2001. All 25 polled expected the Fed to move to a neutral directive when it next meets in two weeks, but leave rates steady at that time. Evidence has mounted in recent months that the giant U.S. economy's frenetic pace of growth in the first half of the year has subsided with retail spending and home sales moderating and parts of the economy like manufacturing actually contracting. On the back of this evidence, stock prices have tumbled -- the Nasdaq is 30 percent lower than at the start of the year -- as worries surface that profits growth will be trimmed as economic activity subsides. Greenspan, the nation's top inflation warrior, said the U.S. labor market was still tight as employers scramble to find new workers. But he said the most recent data could indicate some softening. He warned that a recent rise in energy prices could yet hurt the economy by fueling inflation or putting a damper on consumer spending. The government will release November labor market data on Friday in a report which will be closely watched by financial markets to see if labor market tightness has eased, lessening concerns about future wage inflation. In a bid to stamp out inflationary pressures, the Fed hiked its key federal funds rate on overnight bank lending -- the benchmark for a wide range of borrowing rates from car loans to credit cards -- by 1.75 percentage points between June 1999 and May 2000. The Fed said in its latest Beige Book summary of coast-to-coast economic activity that the economy showed further signs of losing steam in October and November while consumer prices remained stable. Costs of energy and labor were still on the rise but manufacturing companies were generally unable to boost their selling prices, the Fed said in the summary that will be used when members of its policymaking Federal Open Market Committee meet in two weeks.