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To: George Martin who wrote (8023)	5/7/1999 9:02:00 PM
From: Jenne	Respond to of 19700

Next week is going to be verrrrrry interesting: The Street One of the problems for the Treasury market is that there's going be a glut of supply. The coming week marks the quarterly refunding, when the Treasury Department auctions off longer-term Treasuries. On Tuesday, it will put $15 billion in five-year notes on the block, and on Wednesday $10 billion in 10-year notes go on sale. With so much nervousness about the Federal Open Market Committee meeting the following Tuesday, it may be difficult for the market to deal with the supply challenge. Following the auction, it's on to the data. Thursday the April retail sales figures and Producer Price Index get released. Friday brings the April Consumer Price Index. The two inflation reports -- the PPI and the CPI -- are important, but retail sales will get the most attention since it will play an important role in fleshing out second-quarter gross domestic product. Writ large over the week will be the debate over what the FOMC is thinking these days. The signals are very mixed. Friday, two reporters who are seen as having close ties to Fed officials, The Washington Post's John Berry and Market News' Steven Beckner, came out with essentially contradictory articles on what Fed Chairman Alan Greenspan's Thursday speech -- which the bond market took as an indication the Fed was moving toward a tightening bias -- was really about. In a front page piece, Berry wrote: The Fed chairman's sweeping assessment indicated that he believes the U.S. economy can continue to grow, within some limits, more rapidly than in the past without causing inflation to increase. That assessment, which is shared by many but not all of his Fed colleagues, also suggests that the central bank is unlikely to raise short-term interest rates as a result of the strong economic growth so far this year. But Beckner's article led off with this: It was almost surely no accident that Federal Reserve Chairman Alan Greenspan's speech Thursday to a Chicago Fed banking conference had the effect of pushing long-term interest rates higher, Fed sources say. It is very unlikely Greenspan was either surprised or disappointed by the bond market selloff his remarks precipitated, said the sources. Although there is, as yet, scant evidence of accelerating inflation -- and no immediate inclination by Greenspan or most of his colleagues on the Federal Open Market Committee to tighten monetary policy -- the Fed chairman's views reflect a growing trepidation about potential inflation pressures among FOMC members, sources indicated