Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Defrocked who wrote (7464)	11/8/1997 8:13:00 PM
From: vegetarian	Respond to of 18056

Regarding raising interest rates by AG next week, here is part of the commentary by Bob Bose in his weekly economic update, Quote: There was, however, one very interesting item that received, surprisingly, very little coverage - a speech on Friday by Chairman Greenspan at the Center for Financial Studies in Frankfurt, Germany. The topic was measuring prices, or inflation if you will, and it is available in its entirety on the FED's website. The salient items are that Greenspan referred to the Boskin Commission Report that had concluded that inflation was over- stated by perhaps one full percentage point and then noted that "Researchers at the Federal Reserve and elsewhere have come up with similar figures." A few more quotes are also noteworthy. "Recent work by staff economists at the Federal Reserve Board has added corroborating evidence of price mismeasurement, ... " and "... that the true quality-adjusted prices have been rising more slowly than published price indexes." While I realize the job of the FED is forward looking, and "published price indexes" are simply reporting current data, Greenspan's remarks do not imply a near term rate increase. First, if the Chairman of the FED believes the indexes overstate inflation, and inflation is low, there would not appear to be a need to tighten unless one expected a pretty sharp acceleration. And two, these remarks simply remove any political cover for a rate increase this week.