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To: michael97123 who wrote (47438)	1/29/2001 10:22:59 AM
From: GVTucker	Read Replies (1) \| Respond to of 77400

michael, RE: There is no risk of a coming recession however, because in reality it is here already. I would just disagree with your belief that the Fed can stop a recession; that is probably the core of our disagreement. I do think, however, that if the Fed makes mistakes, that they can exacerbate a recession. And that said, I think that a 50 bp cut this coming Wednesday will certainly sufficient at this time. A 75 bp cut will send that message that the Fed will do 'whatever it takes' to try and stave off a recession, inflation be damned, and that will have serious consequences on the level of the $$ and inflation.

To: michael97123 who wrote (47438)	1/29/2001 11:59:31 AM
From: Adam Nash	Respond to of 77400

Given the length of time that inflation expectations "stick" in the system, there has been little meaningful debate over the proper focus of a central bank for over 20 years now. The old linear trade-offs between growth and inflation assumed a level liquidity in terms of inflation expectations that just do not exist. The problem the Fed has is that the money supply has become effectively unmeasurable, and fundamental debates about measurement of productivity severely affect the outcome of planned action. I don't know how powerful a recession can be with unemployment at 4%. Even if unemployment rose 50% to 6%, it would just be reaching what was considered the non-inflationary minimum only five years ago.