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

To: Tommaso who wrote (1744)	1/29/1998 9:09:00 PM
From: Stitch	Respond to of 9980

Tommaso, All I am surprised no one posted this but I will go ahead and do so. POSTED FOR PERSONAL USE ONLY Greenspan Sees Asian Crisis Moderating Growth in U.S. Dow Jones Newswires WASHINGTON -- Federal Reserve Board Chairman Alan Greenspan Thursday warned of further trouble ahead in the U.S. economy from the Asian financial crisis, which should lead to a moderation of U.S. growth from its "recent brisk pace." Testifying before the Senate Budget Committee, Mr. Greenspan suggested that current risks in the economy still appear evenly balanced given that potential price pressure from tight labor markets may be offset to some degree by lower import prices linked to the Asia crisis. The Fed chairman still cautioned about the need for vigilance against inflationary pressures but he also said that some caution must also be taken in being too overaggressive in curbing domestic inflation. Mr. Greenspan said that "we must be vigilant to the reemergence of destabilizing influences -- both higher inflation and short falls in demand and decreases in some prices that would press the disinflation process too far, too fast." His testimony largely focused on fiscal matters. But the Fed chairman aid that the U.S. economy has been "exceptionally healthy with robust gains in output, employment and income." At the same time, he said, "inflation has remained low -- indeed, declining by most measures -- over the past year." Wall Street was cheered by the Fed chief's remarks. Stock prices moved higher immediately after Mr. Greenspan began his testimony. But Mr. Greenspan said that the U.S. economy has so far "experienced only the peripheral winds of the Asia crisis." He said that before the end of the spring, he expects "the abrupt current account adjustments that financial difficulties are forcing upon several of our Asian trading partners will be showing through here in reductions in demand for our exports and intensified competition from imports." What this article omits is that in his testimony Greenspan indicated that he felt the IMF had exercised excesses in loan requirements but that it was learning fast. An interesting comment IMO. In adition there was discussion of balancing the budget and Greenspan endorsed not using the SS surplus. He also encouraged congress to further fund IMF. best, Stitch