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To: mishedlo who wrote (9517)	1/30/2001 11:04:32 PM
From: Walkingshadow	Respond to of 13572

Mishedlo, I'll go out on a limb here. I think it more likely we get 25 bp than 50bp. My reasoning is that AG is plodding and methodical, and very carefully considers his options and their potential effects. 100 bp in less than a month is a radical adjustment by anybody's standards, and AG is not a radical kind of guy. He more typically will make small adjustments, then wait and see what the effect was before deciding what to do next. So, this is what I think he will continue to do. Also, his primary mandate involves controlling inflation within narrow limits. He couldn't care less one way or another about the stock market, IMHO, except in so far as the market is a manifestation of macroeconomic trends, or might effect them, or provide evidence about the direction and strength of macroeconomic trends. And, there are definite early signs that inflation is gathering steam. AG knows that inflation can be exceedingly difficult to control if you wait too long to take steps to do so. I think that is his worst nightmare: runaway inflation. The energy sector in particular is exerting increasing inflationary pressure, but there are other sources of potential inflation as well. I think AG is very wary of these developments, and would not want to help push us into an inflationary recession. So, for fear of doing so, I think he'll err on the cautious side, ease 25 bp, and see what happens......not to the stock markets, but to economic figures and reports, inflation, and growth. But I should emphasize that I'm no Greenspan watcher, so take it for what it's worth, which is JMVHO Walkingshadow