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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Investor2 who wrote (511)	1/6/1998 6:15:00 PM
From: Stitch	Respond to of 9980

Investor2; <<Will the Fed be successful in their attempts to keep the economy ontrack?>> Atlanta Bank Head Optimistic January 6, 1998 ATLANTA - The Associated Press via Individual Inc. : The chief of the Federal Reserve Bank of Atlanta said Monday he expects 1998 to be another good year for the U.S. economy and that he is less worried about ''Asian flu'' than he is about ''economic amnesia.'' - ''Looking ahead, I expect that 1998 will be another good year, if not the benchmark that we had in 1997,'' Jack Guynn, president and chief executive officer, told the Rotary Club of Atlanta. - He expects gross domestic product to continue to grow, but at a slower pace than in 1997. He projected GDP growth at about 2.5 percent, down from about 3.8 percent for 1997, and continued low inflation of some 2.5 percent as cheaper Asian imports provide more competition and monetary policy keeps down overall prices. - Guynn also projected unemployment to continue at around 4.5 percent. - In his speech and subsequent answers to questions, he was generally optimistic about the Asian economic problems and their impacts on the United States. He suggested that in the short term, the result will be taking 1/2 to 3/4 percent off GDP growth, but he also noted the value of the related competition. - ''While I'm not worried we'll catch the Asian flu here in the United States, I do see a few distressing signs of economic amnesia,'' Guynn said. - He cited the congressional refusal to extend ''fast-track'' negotiating authority to President Clinton last year and called ''defeatist'' and short-sighted the apparent reluctance to trade with poorer countries. - ''I hope Congress will reconsider fast track this year, so that we can continue to pursue a policy of expanded free trade,'' he said. - Guynn added, though, that he expected continued economic progress in Mexico and the Latin American economies in general. - ''We're very optimistic as we look at that part of the world,'' he said. - ''The real issue for 1998 could be the internal threat to our post-war economic leadership,'' he said. ''I am concerned that these voices of discontent and the voices that shouted down fast track will become a protectionist chorus.'' - He also stressed that U.S. political leaders should use the opportunity of a healthy economy to attack the deficit and looming problems with Social Security and Medicare programs. - ''I think we ought to take the entitlement medicine now, while our healthy economy can help us stomach the resulting political indigestion,'' he said. ''If we don't, the balanced budget and the fiscal restraint we are now experiencing will evaporate.''