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To: PaulM who wrote (17022)	8/31/1998 7:10:00 AM
From: Bobby Yellin	Respond to of 116798

great post newsday.com --what I found interesting especially in this article is the comment that USA was possibly motivated because they couldn't get enough support..I assume from the other countries.. so many things to watch

To: PaulM who wrote (17022)	8/31/1998 8:17:00 AM
From: Alex	Respond to of 116798

Fed Seen Sitting Tight Amid Global Turmoil 10.19 a.m. ET (1419 GMT) August 30, 1998 By Knut Engelmannÿÿ<Picture: Reuters>JACKSON HOLE - Top economic policy makers wrapped up an exclusive gathering in this remote Rocky Mountain resort Saturday amid clear signs the U.S. central bank has lost any burning desire to raise interest rates soon. Senior Federal Reserve officials, gathered here for a few days of academic debate on the topic of income inequality, did not offer the prospect of an imminent cut in rates. But there appeared to be a growing consensus among them as well as many of the private economists who held informal discussions with them that the Fed's best bet for now is to sit tight. The high-level meeting, held far away from the hurly-burly world of financial markets, coincided with one of the worst bouts of turmoil that investors around the globe have suffered in decades. But not even the serene beauty of the surrounding scenery could deflect from what many here described as a sense of heightened concern at the Fed over the unfolding drama in Russia and other emerging markets and its possible effects on the still-robust U.S. economy. "There is a lot of concern," said David Hale, senior vice president and chief economist at Scudder Kemper Investments. "Nobody really knows yet how this is going to pan out." Several officials indicated their belief that an uptick in inflation caused by strong domestic demand no longer posed the prime threat to the U.S. economy, obliterating at least for now any leanings in favor of a rate rise. Whether the Fed indeed abandoned its formal "bias" toward a tightening in credit conditions at its most recent policy meeting on Aug. 18 will not be known until early October when a summary of the debate at that session is due for release. But several Fed watchers here suggested the central bank would be well-advised to give financial markets at least a signal of where it stands - before it is too late and the global turmoil spins out of control. "It would be welcomed in the financial world if they acknowledged that the set of risks has shifted," said Alan Sinai, chief global economist at Primark Decision Economics. "But I'd be amazed if they weren't to take note of it. This Fed is too smart." The ever-reticent Fed Chairman Alan Greenspan, who has the final say over any U.S. interest rate decision, gave no public indication of what he thinks the immediate future holds for the world's top economy and edgy financial markets. Greenspan left here early in the afternoon, reportedly en route to the California for a week-long vacation. His next public appearance is scheduled for Friday, when he is due to deliver a speech on "The New Economy" at Berkeley University. But in one of the strongest hints that the mood among Fed has shifted, St. Louis Fed President William Poole told Reuters in an interview here on Friday he no longer favored an immediate rate rise, as he did at a May meeting of the central bank's rate-setting Federal Open Market Committee. Noting that the global situation had changed drastically since then, he said: "Given what's been going on in the markets, there is more reason than before to wait and see how things play out." "We have the luxury of waiting, given what's going on out there," added Poole, who is widely known for his strong anti-inflation views. A conference participant with close ties to the Fed described Poole's remarks as an "extremely significant" statement that signaled at a broader shift in opinion among a wide band of senior Fed policymakers. Observers agreed that financial market developments and the behavior of U.S. consumers in the weeks ahead would be the key determinants of the Fed's next step. A severe slump in global markets could wipe out billions of dollars in stock market wealth created over recent years and depress consumption enough to plunge the U.S. economy into a severe downturn, they said. "The central question is at what point does the Fed perceive the market contraction as having an effect on the real sector," said one conference participant. "At that point they will act preemptively." The government reported on Friday that U.S. consumers cut their spending in July for the first time in more than two years, primarily due to a dearth of new-car models caused by a protracted strike at General Motors that ended in late July. The Fed has kept interest rates on hold since March of 1997. Its next policy meeting is scheduled for Sept. 29. foxmarketwire.com