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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Sosmartinov who wrote (46435)	5/27/1999 1:22:00 PM
From: JeffA	Read Replies (1) \| Respond to of 90042

Plus this beauty looming on the horizon..... Thursday May 27, 12:58 pm Eastern Time Medley sees Fed rate hike if no slowing - sources NEW YORK, May 27 (Reuters) - Medley Global Advisors is telling its clients that only slower U.S. economic growth or a clear sign that productivity increases can finance continued growth will keep the Federal Reserve from raising interest rates, sources familiar with the firm's thinking told Reuters. Such a slowdown could occur, but it would have to make itself evident in economic data to keep the Fed from raising rates, the U.S. investment advisor said, according to the sources. Medley Global Advisors, a U.S. policy advisory firm, said if growth continues at its current pace, that could trigger a tightening, the sources said. ''The growth side is motivating the Fed and they think the Fed is likely to go fairly soon,'' a Medley client said, describing the firm's views. If the economy continues to motor along at the present pace, if stock markets continue to rise, and housing prices continue to accelerate, the Fed will raise rates, Medley said, a source familiar with the firm's views confirmed. Unless economic data in June give Fed officials reason to believe that the long-awaited slowing has arrived, the ''hard bias'' that the Federal Open Market Committee (FOMC), the policy-making arm of the Fed, adopted on May 18 makes it likely that rates will rise and there's nothing to rule out a move as soon as June, Medley told clients. The Fed incorporated a bias toward higher interest rates in the monetary policy directive it adopted at its May 18 meeting. The FOMC will meet next on June 29-30.