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Pastimes : THE COFFEE SHOP--A place to discuss Minute Subjects -- Ignore unavailable to you. Want to Upgrade?

To: Ish who wrote (22086)	5/20/1999 6:40:00 PM
From: Mephisto	Read Replies (1) \| Respond to of 24894

[ She was wearing only bikini bottoms. We fished that spot a little longer.] Yep! You have fun when you are on the water. You have all the fun ~ at the moment. Have some pity for me. I've been digging up ground cover with huge fork. Ouch! My back hurts! I came in for bottle of juice. Of course, Mephisto tries to sit on my lap while I type so I took off my long-sleeved sweat shirt and placed it on housemate's kneeling stool. M sits on it and purrs.... Did I hear you complain about your stocks in previous post?

To: Ish who wrote (22086)	5/20/1999 6:46:00 PM
From: Mephisto	Read Replies (1) \| Respond to of 24894

You think market is down because people anticipate rise in interest rates? I found this story: "Fourteen of 27 primary dealers of U.S. government securities said Wednesday they see a hike in the federal funds rate by mid-November and 12 of those said it could come at one of the next two Fed meetings on June 29-30 or August 24. That outlook represents a dramatic change in expectations just in the past month. A Reuters poll in mid-April forecast steady rates until the third quarter of next year. A 0.7 percent surge in the nation's main inflation barometer, the Consumer Price Index, changed a lot of hearts. The inflation data released on Friday was widely seen as the trigger for the Fed's shift to a tightening bias on Tuesday. The bias change means the central bank is now leaning more toward a rate hike than a cut as its next move and it signaled to the markets growing concern at the Fed about inflation. ''There will be some ammunition for the Fed to follow through on the shift to a tightening bias. It could be a growth trigger. It could be an inflation trigger,'' said David Greenlaw, economist at Morgan Stanley Dean Witter. ''Most importantly, I think we may begin to see a shift in inflation expectations, partly as a result of a turnaround in energy prices,'' Greenlaw added. Greenlaw's firm predicts a quarter-percentage point rate hike at the Fed's August meeting. The poll results showed four out of 27 respondents expect the Fed to raise the key federal funds rate by a quarter percent in June and another seven see it in August. The rate now stands at 4.75 percent. One predicted a rate increase in either August or October and two others said October or November. Three put the next move in the first quarter of next year and one saw it in the second half of 2000. Nine of the firms said they expect no change in Fed policy through the end of 1999. Two of the 30 U.S. primary dealers could not be reached for forecasts, and one said it was still revising its outlook and figures were not yet available. Michael Moran, chief economist at Daiwa Securities, said although the pace of economic growth will probably slow in coming months, there will likely be a modest acceleration in the CPI. ''It's not going to be troubling, but it is going to be shifting in the upward direction,'' Moran said of the CPI. ''I think the Fed is going to feel uncomfortable with an accommodative stance, and they will take back some of the easing from last fall,'' he added. The Fed cut interest rates three times in rapid succession last fall when a global financial crisis spilled over to U.S. markets and raised the threat of a credit crunch. The rate cuts brought the fed funds rate down to 4.75 percent from 5.50 percent. The Fed explained its bias change on Tuesday by saying it was concerned about an inflationary build-up that could undermine the economy. Joe Carson, chief fixed income economist at Deutsche Bank Securities, said he thought it was significant the Fed opened its statement with the words: ''While the FOMC did not take action today...'' Reading between the lines, Carson said he thought the reference to ''today'' indicated some members had pushed for a rate hike on Tuesday. ''That tells me they are going to at the next meeting,'' he said. ''We won't get another 0.7 percent on CPI but even if you get another 0.2 percent or 0.3 percent, that means monetary policy is too accommodative,'' he said. Marilyn Schaja, economist at Donaldson, Lufkin & Jenrette Securities Co., said the timing of the Fed's next move will depend mostly on the economic data that comes out before the June FOMC meeting. ''My best guess is they will be able to get away without doing anything for the rest of year. But it could happen as early as next meeting,'' she said. ''We are telling everybody to be on heightened alert for the numbers.''