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To: jbn3 who wrote (58513)	8/17/1998 8:31:00 AM
From: Frank Ellis Morris	Read Replies (1) \| Respond to of 176387

Maybe Greenspan will say that even though we had a virtual 10% correction in the market, there is still too much irrational exhuberance and raise interest rates by a point or two. I am not ever underestimating him again. Frank

To: jbn3 who wrote (58513)	8/17/1998 9:57:00 AM
From: Darth Trader	Read Replies (1) \| Respond to of 176387

RE: FOMC, we may very well get a rate reduction if only for the reason that Greenspan may be retiring soon.

To: jbn3 who wrote (58513)	8/17/1998 4:05:00 PM
From: Lee	Read Replies (1) \| Respond to of 176387

Hi 3,..Re:<<I doubt that we will get a rate cut for the following reasons: Greenspan has been trying to slow the market and restrain "irrational exuberance" >> AG has been trying to prolong these economic circumstances. As you have noted, the modus operandi is to be pre-emptive and some voting members wanted to raise rates in Feb. and again in March but AG was willing to wait to evaluate the effects of any slowdown which SE Asia may have caused. Fortunately, for us, they have managed an extremely durable and stable US economy which is after all their charter but the CPI may have reached a bottom for this cycle according to the chart below. dismal.com CPI - 1yr chart Still, with average hourly wages growing at better than 4% annually, and some small pockets of real estate inflation, the US economy remains stable and the FED is probably on hold for now. I don't see how they could ease though considering the overall underlying strength. Message 5508280 Cutting through these distortions, the U.S. economy continues to grow at a solid pace with very little inflation. For those who think the FED should ease to help out floundering Asian economies, the best way the US can help is to maintain a stable and strong US domestic economy and easing would fuel an already very healthy situation. The IMF's function is to aid overseas faltering economies and the charter of the FED should not be altered. For others who may be concerned about the inversion in the yield curve, I would simply note that it is entirely caused by flight to safety buying of US treasuries and not by any underlying weak domestic fundamentals. Sorry you asked? <VBG> Lee FED expert - NOT!