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To: Zardoz who wrote (33234)	5/6/1999 9:06:00 PM
From: goldsnow	Respond to of 116791

It is what traders believe that counts...:) U.S. govt bonds close sharply lower in New York on inflation fears NEW YORK (AFX) - Prices of U.S. Treasuries closed sharply lower, as nervous investors sold on fears of rising inflation pressures after this morning's speech by Fed chairman Alan Greenspan to the Chicago Federal Reserve, dealers said. At 4:21 PM, the 5-1/4 pct 30-year bond was down 1-3/32 at 92.12 yielding 5.785 pct, the 4-3/4 pct 10-year note was down 24/32 at 94.16 yielding 5.491 pct, and the 5 pct two-year note was down 5/32 at 99.215 yielding 5.167 pct. The June bond future was down 1-5/32 at 118-23/32. After a string of economic indicators over recent months that show the U.S. economy growing at a stronger than expected pace, investors are worried that this morning's remarks by Greenspan about tightening labor markets may prompt a rise in Fed interest rates, dealers said. "There is a great deal of worry that the economy is overheating, since the first-quarter GDP last Friday. Greenspan didn't say anything to dampen those concerns, and instead spoke about the healing process taking place abroad and about upside risks to the U.S. economy," said Bill Sullivan, financial economist at Morgan Stanley Dean Witter. Many dealers said Greenspan's comments were fairly neutral, but the dramatic response by investors reflects growing concerns of future Fed action. Expectations that tomorrow's April payroll figures will further indicate strong growth also prompted selling, dealers said. A figure of "275,000 is expected, and anything slightly higher will be greeted negatively. But anything positive will probably be explained away," said another trader.