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To: Mohan Marette who wrote (31982)	3/4/1998 10:17:00 AM
From: Lee	Respond to of 176388

Hi Mohan,...OFF TOPIC Mohan, It's hard to reconcile all that contributes to our interest rate, but when the rate got to 5.66% recently, it was artificially low due to the influx of funds from the SE Asian crisis. Our economy is very strong as evidenced by the Q4 GDP which came in at 3.9%. It is the consensus of the economists that the sustainable rate is about 2.5%. It is also debated that the impressive productivity gains cannot be sustained going forward. Finally the US unemployment rate is below the so-called NAIRU or non accelerating inflationary rate. So, unless Mr. Greenspan eases the Fed funds rate, it will be difficult to push below the 6% for any extended period IMHO. Part of the increase in yield recently has to do with strong NAPM, housing, and generally continued strong growth. Part may have been due to redeploying assets into stocks since the Dow and S&P have recently made new record highs, even in the face of rising interest rates. Also, last year we got a 25 basis point tightening and the economy and markets still did well. Hope that helps some. Lee