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To: hdl who wrote (125948)	5/18/1999 4:04:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

hdl, P/E ratios move in an inverse relationship with 30 year bond rates. The Fed does not directly control long-term interest rates. That is strictly market mediated. As far as I am concerned, the major inflationary issue is oil. In spite of the fact that it is left out of the core rate, it has a pervasive effect of inflation because of chemicals, transportation, power, etc. So the question is the amount of time it will take for the oil price increases to work their way through the economy. Countervaling the current price of oil is the fact that there seems to be a surplus, and the only thing bolstering prices is OPEC mandated pumping reductions. I expect cheating on quotas to begin in earnest, and that should bring down the price of oil. TTFN, CTC