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To: Jim Willie CB who wrote (3745)	11/21/2003 3:08:59 PM
From: yard_man	Respond to of 108743

anticipation of that?? CYPT up nicely today -- I don't usually do that well at catching falling knives -- maybe more downside to come.

To: Jim Willie CB who wrote (3745)	11/21/2003 5:14:06 PM
From: Ruffian	Read Replies (1) \| Respond to of 108743

Fed Reserve Sees Steady Growth Ahead Friday November 21, 4:56 pm ET WASHINGTON (Reuters) - Federal Reserve officials said on Friday that healthy U.S. economic growth looks likely to stick around, but low inflation means the pickup would not usher in interest rate increases for some time. ADVERTISEMENT Fed Vice Chairman Roger Ferguson said ample capacity created in the late 1990s building and hiring boom will keep price rises at bay, and gives the U.S. central bank the "luxury" to monitor events as the economy recovers. "Indeed, inflation still seems more likely to move lower than increase," Ferguson told the Executives' Club of Chicago. And in a Reuters interview, Minneapolis Fed President Gary Stern said rates could stay low so long as inflation remained tame -- adding that he did not foresee a material rise in inflation next year. Their remarks echo frank comments from policy-makers in recent days indicating that rate rises won't materialize for some time, barring an unforeseen price jump. Stern did say the central bank should not let financial market concerns dictate how long to retain the Fed's vow to keep rates low for a "considerable period." Asked if he was worried about the market's reaction to a change in the statement, he said: "Yes, sure, but I don't think that ought to be a constraint on changing it when it's appropriate to change it ... I'm not sure I ought to lose a lot of sleep over it." The Fed's benchmark federal funds rates stands at a 45-year low of 1 percent after 13 cuts since the start of 2001. ECONOMY TO SET THE RULES St. Louis Fed chief William Poole was more oblique -- saying only that movements in rates would be determined by the course of the U.S. economy, not the passage of time. Asked what the central bank meant by "considerable period," Poole quoted from minutes of the September policy meeting. "That was an effort to clarify what considerable period means and I think that it is a pretty clear statement that policy is going to react to changing circumstances," he said during audience questions at an event at the CATO Institute. The officials sounded upbeat about economic growth, although some offered caveats. Atlanta Fed President Jack Guynn said the economy was now growing in a "broad-based and sustainable" way and the corporate sector was reviving. Business spending growth had been a key missing ingredient in the halting recovery from the 2001 recession. Like most policy-makers and private economists, Guynn said he expected growth to moderate from the torrid 7.2 percent annualized clip of the third quarter, but that the housing and consumer sectors should stay strong. Ferguson said the job market -- another laggard in the recovery until recently -- "appears to have stabilized during the summer," with more hiring underway. "The business sector has been the locus of weakness in this expansion," he added. "However, the extreme caution that had been gripping firms now appears to be dissipating." The Fed second-in-command said the risk the recovery might stall "cannot be discounted completely" -- if, for example, the lift that tax cuts gave consumer spending in the third quarter proved transitory. But he said the possibility of this happening had diminished from a few months ago. "Although I do not expect a repetition of the extraordinary economic performance of the third quarter, I do expect growth to be sustained," Ferguson said. "Although the recovery now appears to have turned the corner, much additional progress remains to be made before our country's labor and capital resources are fully utilized," he said, referring to the point at which price pressures might normally be expected to appear. Stern said growth has undeniably picked up steam and was likely to be around 4 percent or "a bit better" next year. He added the "center of gravity" among business contacts had shifted toward more optimism. But the Minneapolis Fed chief warned: "I wouldn't get too ebullient," noting some retailers and businesses were still cautious.