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To: Lee who wrote (72283)	10/16/1998 9:32:00 AM
From: Mohan Marette	Respond to of 176387

<Economy-CPI> Instant view from economists. Good morning Lee: I am sure you saw the CPI number this morning,here are some views on it from various economists in case you did not see this. ================== Friday October 16, 8:48 am Eastern Time INSTANT VIEW - U.S. CPI unchanged in September NEW YORK, Oct 16 (Reuters) - Following are comments from U.S. economists after the Labor Department reported its Consumer Price Index (CPI) was unchanged in September after a 0.2-percent August gain. Core CPI, which excludes volatile food and energy prices, rose 0.2 percent, matching August's gain. Economists polled by Reuters had forecast, on average, 0.1-percent increases in both overall and core CPI. TIM O'NEILL, CHIEF ECONOMIST, BANK OF MONTREAL, BANK OF MONTREAL, TORONTO: ''You've got flat on overall, which wasn't that big a surprise ... On a year-over-year (basis) the overall is about where you'd expect it to be, given the patterns over the last several months.'' O'Neill was interviewed on Reuters Television. JOHN WILLIAMS, CHIEF ECONOMIST, BANKERS TRUST NEW YORK: "The headline number was a favorable surprise, but was entirely due to the big drop in energy prices. ''Core CPI was up 0.2 percent. It's a fairly stable number but does seem to have bottomed. It is no longer declining. So inflation is positive and the best news is probably behind us. Going forward, we'll probably see fairly steady (inflation level) or we may see it edge up in light of weakness in the dollar.'' CARL TANNENBAUM, CHIEF ECONOMIST AND HEAD OF TREASURY RESEARCH, ABN AMRO N.A.: "The backdrop provided by the CPI certainly gives further justification to the Fed's move of yesterday. The PPI increase of earlier in the week might have put a little egg on the Fed's faces as they tried to address the growing pressure in the banking system with the rate cut yesterday. ''I don't think we have had a flat CPI for a while, and it begins to show the deflationary pressures from overseas are really holding down the inflation rate here.'' CHRISTOPHER LOW, CHIEF ECONOMIST, FIRST TENNESSEE CAPITAL MARKETS: "It's sort of a split result. It's really only fractionally higher (than expectations). "The most noticeable difference between this and the PPI is that in the PPI there were big increases in car and truck prices. We had all heard stories about some pretty generous auto discounts in September. We were beginning to doubt it after looking at the PPI, but now more than ever, the PPI (auto) result looks like a fluke. "There's a lot of good news still on the energy level. There are still big wholesale price declines that haven't come through yet. ''As far as the Fed is concerned, they're not going to ease anyway because of news in the CPI report. Because we keep getting good news, it keeps the CPI off the agenda.'' GREG JONES, CHIEF ECONOMIST, BRIEFING.COM: ''In line with expectations. Better news on the total number. Good news on apparel, car prices, and bad news on tobacco. The bottom line is inflation remains under control and won't be an issue for the Fed in another easing.'' PETER KRETZMER, SENIOR ECONOMIST, NATIONSBANC MONTGOMERY SECURITIES: "It was a good CPI, it came in more the way we had been expecting the PPI yesterday. The transportation bias that occured yesterday in the PPI did not carry through to the CPI. That was true last year as well. So the problem in terms of new model introduction had little effect on the consumer level. Basically it was a very good report. ''It's consistent with stable inflation, not falling inflation, certainly not deflation, the way some people (were) worried, but certainly stable and continued low inflation.'' RICH KASMIN, ECONMIST, WARBURG DILLON READ LLC.: "It's very benign. There's nothing in here that makes the market think the Fed is alarmed and I don't see any trends in here alarming to me. ''The housing data were surprisingly weak. That was a main area of concern but (price rises) are not happening ... Energy was down, which was surprising, so you may see a spike up (in energy) next month. But we're up 1.4 percent year-over-year on total CPI. What else can you say?''