European Stars and Stripes (Newspaper) - February 01, 1994, Darmstadt, Hesse                                Page 4 the stars and stripes tuesday february 1,1994 to Rise Greenspan says Washington a Federal re serve chairman Alan Greenspan put the country on notice monday that the  Bank would begin pushing inter est rates higher at some Point to keep inflationary pressures from getting out of control. The fed chairman gave a Strong Indi cation in congressional testimony that rate increases could come at any time. Greenspan s comments monday had been eagerly awaited by financial markets for signs of the Central Bank s  was his first testimony on the state of the Economy since july. He said the Issue of when to raise in Terest rates would be discussed by the fed s top policy making committee the Federal open Market committee when it meets thursday and Friday. While raising interest rates has the effect of slowing borrowing and economic activity Greenspan sought to assure members of the congressional joint economic com Mittee that the fed s actions would not be an Effort to end the recovery. Such an action would not be taken in order to Cut offer limit the eco nomic expansion but rather to sus Tain and enhance it Greenspan said in his  reaction pres ident Clinton said that there s no Evi Dence that inflation v Greenspan hoped that Market set Long term rate such As those on mortgages would stay Low if the fed did raise Short term rates. I Hope that the Stock Market won t taken Adverse View of higher Short term rates because we be still got Good Strong growth in this Economy Clinton said. Increasing interest rates Are something the Central Bank has not done since the Spring of 1989. As the country slumped into a recession and then endured a painfully Long and weak recovery period the Central Bank noved to Cut interest rates to their lowest Levels in three decades. But Greenspan signalled monday that this period was coming to an end. He said that Short term interest rate were at abnormally Low Levels and that the Central Bank must avoid the mistakes of the past when policy makers waited too Long to respond to inflationary pressures. Greenspan said that while there were no current visible signs of growing inflationary pressure policy makers could not afford to be complacent. By the time inflation pressures Are Evi Dent Many imbalances that Are costly to rectify have already developed and Only harsh monetary therapy can restore the financial stability necessary to sustain growth he said. This situation regrettably has Arisen too of fled in the  rep. David r. Obey chairman of the joint economic committee urged Green Span not to move too quickly to raise rates. Given the limited number of indicators a ii v a rj1"1111 dressing the nation governors monday at the White House. From left Are sout Carolina gov. Carroll a. Campbell Clinton vice president Al Gore obscure Vermont gov. Howard Dean Attos nay general Janet Reno new Jersey gov. Christine Whitman and Connecticut gov. Lowell Weicker or. Clinton offers gop governors compromises on health plan that inflation is around the Corner and Given the uneven nature of the recovery. I Hope that time can be delayed for a few months at any rate the Wisconsin demo crat said. In answering questions Greenspan did not go any further to indicate the Jiming of a rate hike. The Clinton administration which has made Low interest rates the Centrepiece of  program has been insisting lately that there was no need for the Central Bank to tighten credit conditions because inflationary pressures were nonexistent. However Many private economists have been forecasting that the fed would soon move to boost the Short term rates Possi Bly As soon As the end of february As a Way of letting financial markets know the Central Bank was being vigilant. Greenspan acknowledged to the com Rattee that it was a difficult task for the fed to know exactly when to move to Start pushing rates higher. Peres signal agreement is near Davos Switzerland a Plo Leader Yasser Arafat and israeli foreign minister Shimon Peres on monday indicated that a breakthrough was near in their bid to wrap up an agreement on israeli withdraw Al from the Gaza strip and Jericho. Arafat said the two men would meet again in about one week in Cairo Egypt to finalize the Deal. We probably could have finished today but or. Peres already had put off his depart Alk san Vito rated nil f Menacer members stationed there have received orders for their next duty assignments. Orders in do a out the