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To: Mohan Marette who wrote (52445)	7/20/1998 8:46:00 AM
From: Lee	Read Replies (1) \| Respond to of 176387

Morning Mohan,..Re:<<Very interesting to note that now they are talking about lower interest rate on account of the expected contraction in GDP growth rate >> Boy, do you ask tough questions!<VBG> I think it's really way too early to even think about the Fed easing but more importantly, there's a new economist, James Padinha, who writes for TSC who can state the reasons much more clearly. That URL is: archive.thestreet.com Get Off My Cloud He lists a number of reasons why this won't happen, among them being, - M2 growth = 7.2% yr/yr - consumer borrowing rising at 8.9% rate and business borrowing as well - Dow rising at 14.8% yr/yr rate - Unemployment rate at a generational low of 4.5% - Average hourly earnings rising at 3.9% rate - Consumption rising at 6% annual rate - CPI has bottomed dismal.com - benefit costs accelerating - In May 19th FOMC, two members voted for an immediate tightening There are other reasons that I don't think an ease is coming even if 2Q GDP prints negative, among those being that we may have seen the worst in the trade numbers and also Mexico and Canada are our biggest trading partners last I saw data. Only 13% of our exports go to Asia. Will confirm but I think that's correct. Hope this helps. Regards, Lee