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To: 2MAR$ who wrote (39)	4/27/2001 10:39:28 AM
From: 2MAR$	Read Replies (1) \| Respond to of 208838

Former Fed Governor Yellin: Economy Remains At Grave Risk NEW YORK (Dow Jones)--Janet Yellin, a former Federal Reserve governor and former chair of the White House Council of Economic Advisers, thinks the U.S. economy remains at "grave risk" of heading into a recession. In a CNBC interview Friday, Yellin, now professor at the University of California Berkeley, said she was pleased to see U.S. gross domestic product growth was up 2% in April, but she is concerned about how well consumer spending will be able to hold up. "I have concerns about consumer spending," said Yellin. "The biggest negative in my mind is the reverse wealth effect." Strong stock prices had boosted consumer spending. But Yellin said the declining stock market has dragged consumer wealth down by $5 trillion, and expects to see an impact on consumer consumption soon. "I am fearful that we will see the impact going forward, particularly if unemployment rises," she said. Further burdening consumers, according to Yellin, is the rising rate of debt relative to consumer income. She thinks consumers may be trying to maintain past spending patterns, a problem which could be exacerbated by a weakening job market. -By Victoria Marcinkowski, Dow Jones Newswires; 201-938-2408 (END) DOW JONES NEWS 04-27-01