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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (134)	5/20/1998 9:24:00 AM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 3536

Chip, It has been pretty clear for a while now that there is a significant group of Fed officials, perhaps even a majority, who are very concerned about rising labor market pressures and believe rates should be hiked. There have been numerous recent comments to that effect. The problem is Greenspan doesn't appear to come around to that view and it appears the rest of the Board is bowing to the Chairman's view at the moment. This is nothing new as Volcker used to get the same respect. So the question is what will it take to get Greenspan to turn? He is clearly keeping one eye on the renewed political turmoil in Asia and another on very soft commodity prices. I believe Greenspan is very cognizant of the uniqueness of the current economic environment and doesn't want to be responsible for disturbing such unique conditions. I believe he will want to see more concrete evidence. The question will be if the rest of the board gets nervous enough before then to out vote him.