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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (6687)	5/19/2004 10:22:11 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

* [Broaddus:Infl Risks'Balanced' But Must Watch Carefully] Federal Reserve Bank President Alfred Broaddus Tuesday said that, while inflation risks have increased over the past three months, they are still "balanced" and said inflation expectations are "still well-contained." Broaddus, speaking extensively with reporters following a speech to the Maryland Bankers Association at a mountain resort, said the Fed must watch inflation "very carefully" and must not allow a repeat of the 1970s when he said the Fed "accommodated" high oil prices and allowed them to spill over into core inflation. -- Broaddus also said Tuesday that inflation risks have risen in the past three months, but said wage price pressures need to be kept in perspective against the backdrop of strong productivity and continued slack resource use in the economy. Broaddus, in remarks to the Maryland Bankers Association annual convention at the Greenbrier Resort, reiterated the Federal Open Market Committee's recent belief that it can raise rates "at a measured pace," but said the Fed "will monitor incoming information on pricing developments especially carefully in the weeks ahead." * [Fed's Santomero:Must Be Watchful of Further Infl Rise] Echoing earlier comments by a Federal Reserve colleague, Philadelphia Federal Reserve Bank President Anthony Santomero said Tuesday the central bank must be mindful of further signs of inflation pressures, but can generally expect to raise rates at a "measured pace," as last stated by the Federal Open Market Committee. Santomero also repeated that the bond markets have already begun to raise interest rates, effectively working for the Fed. The Philadelphia Fed president also said he remains confident that the higher oil prices will not derail the U.S. economic expansion.