This is from Mr Yardeni.

COMMENT: A year ago, the Fed was biased toward raising the federal funds rate because domestic demand was very strong.. Instead, this rate was lowered by 75 basis points during the Fall of 1998 because of the global financial and economic crisis. Now that the crisis is over, will the Fed take back last year's easing move? I expect a quarter-point hike at the Jun 29-30 meeting and another at the Aug 24 session. But I expect no action at the Oct 5 meeting; then I expect a 50-basis-point cut at the Nov 16 session and a 75-basis-point cut on Dec 21. Obviously, I don't expect that the economy will continue to boom through the end of the year. I also don't expect a rebound in inflation. On the contrary, I expect that two rate hikes and increasing Y2K concerns will trigger a sharp decline in stock prices during September and October, and a weaker economy with lower inflation. This scenario should be bullish for government bonds.

-- y2k dave (xsdaa111@hotmail.com), June 17, 1999

Answers

Ah, but what does Yardeni know? So what if he did his doctoral work at Yale under the direction of a Nobel Laureate? So what if both the "Wall Street Journal" and "Barron's" have called him our best economic forecaster in the 1990s? So what if he's a former mainframe programmer who programmed in, among other languages, Assembly? So what if he has been studying Y2K in detail since June of 1997 and has high-level contacts, including Koskinen, the Bank of International Settlements, the Center for Strategic and International Studies, etc.? So what if he has assembled hundreds of pages of Y2K-related evidence on his website to support his position? So what if he is the chief economist for the securities division of the world's largest bank?

Naw. Just another know-nothing rabble rouser.

-- Don Florence (dflorence@zianet.com), June 18, 1999.