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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: BubbaFred who wrote (43071)	8/3/2002 10:03:21 AM
From: JEB	Read Replies (1) \| Respond to of 50167

Who would have thought the military could become a benevolent dictator? ...add me to the list of people who believed in President Musharraf. Message 17283950

To: BubbaFred who wrote (43071)	8/5/2002 3:32:15 AM
From: IQBAL LATIF	Respond to of 50167

The latest stack of economic reports prompted investment bank Goldman Sachs to predict in an e-mail to clients that the Fed would chop a hefty three-quarters of a percentage point off U.S. interest rates by the year-end. The bank was more optimistic than Roach that a double-dip could be avoided but it said worries about that prospect would spur the Fed into action. The central bank has already slashed rates to a 40-year low of 1.75 percent following a spree of 11 reductions in 2001. Most other economists think more evidence of economic weakness or a serious crisis in the financial markets would be required to persuade the Fed to act. Fed policymakers next meet to mull interest rates on Aug. 13. In a Reuters poll Friday, major Wall Street firms assigned odds of 20 percent to the prospect of a double-dip recession. That was up from 13 percent in a survey conducted just over two weeks ago. "I would say the odds of a double-dip are one in five. They are not zero," said former Fed governor Lyle Gramley, who is with Schwab Washington Research. "Certainly, the Fed is not going to raise rates. If the Fed continues to see signs of weakness, they will act very aggressively." Gramley said that while the evidence for a rate cut is still not there, if the data continue to disappoint, the Fed has an added reason to act forcefully. Inflation is so low that some economists warn a weak enough period for demand could threaten to touch off deflation, a dangerous self-sustaining trend to falling prices.