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Show u ' ' " f The Park Record -vll CI laming onop DUiiis riuienuugn by Sung Won Sohn WELLS FARGO CHIEF ECONOMIST The Federal Reserve's deci sion to reduce teaerai runa interest inter-est rates by only half a percentage percent-age point last week missed opportunities to help the economy econo-my recover more quickly by stabilizing sta-bilizing and improving consumer and investor confidence. The J4-tniiion arop in stock market wealth has sapped the confidence and purchasing power of consumers, while higher energy ener-gy prices have acted like a $50-billion $50-billion tax increase in the past year. Coupled witn manuiactunne cutbacks and accelerating job losses and unemployment claims, there are plenty of signs that the economy needs a major boost from the Fed. Unfortunately, we didn't get enough. The Fed's decision focused on the reality of the economy - some sectors actually are not in bad shape - rather than perceptions by consumers and investors. By declining a larger rate cut, the Fed has not addressed sufficiently sufficient-ly how those perceptions could contribute to worsening consumer con-sumer and market confidence. A continuing slide in the stock market mar-ket - through the wealth effect -could further damage the econo- Second, how effective the rate cut is depends on what's ailing the economy. In a statement, the Fed cited "excess productive capacity" as a reason for its action. It takes much longer for interest rate cuts to have an effect on that kind of problem, which should have sparked the board to make a larger rate cut. The Fed will probably reduce rates again in both April and May to compensate for this missed opportunity. Despite these economic concerns, con-cerns, we tend to be long-run optimists since we expect continued contin-ued growth in productivity to raise all ships, and monetary and fiscal policies to cushion the economic eco-nomic softness. Prospects of an economic turnaround depend on interpretation interpre-tation of several key issues, illustrated illus-trated in the table at right. The bulk of productivity increases will come from the old economy using new communication communica-tion and data management tools. Short-term interest rates will continue to trend down, however, the Federal Reserve won't lower the Federal Funds Rate as aggressively as the financial markets mar-kets expect, as there are still large segments of the economy that are showing signs of stability. Sung Won Sohn is chief economist econo-mist at Wells Fargo & Company. Born and raised in Seoul, Korea, View of the Economy Optimistic Economic setback will be corrected cor-rected by inventory correction and more sophisticated inventory management. Perception is worse than reality: reali-ty: service sector is continuing to add jobs. Increased consumer spending does not mirror plunging confidence. confi-dence. Lower interest rates and tax cuts will bear fruit later this year. The problem is excess supply, not demand: combination of technology tech-nology and cheap labor around the world has ballooned supply-side supply-side potential. Supply-led recessions are marked by low inflation: the cure is a long process that depresses asset prices. Consumers, businesses and the nation are deep in debt: U.S. debt is 5 percent of GDP. If the value of the dollar plunges, it could spark inflation and higher interest rates. Japan has had no success battling bat-tling recession with low interest rates and massive deficit spending. B-11 PhotoAkt CLASSES Are about to begin . . . again! Explore this Incredible Art Medium which integrates Photography, Art. and me lompmei. Conducted by he A. Stctuimm. Off The Wall Manng r 1801.278.3880 FREE Introductory Oases held week of April 9th. Ptose rail carK io hold a scad J unputer. I80l he attended the University of Pittsburgh and the Harvard Business School. A former professor, pro-fessor, he is also former president of the Minnesota Economics Association and has served as a senior economist on the President's Council of Economic Advisors, responsible for eco nomic and legislative matters pertaining per-taining to the Federal Reserve and financial markets. Wells Fargo is a financial services organization with $272 billion in assets, providing provid-ing banking, insurance, investments, invest-ments, mortgage and consumer finance from more than 5,400 locations. c Travel Symposium will convene next week Continued from B-9 Brown, will present results from the current "Affluent Travel Trends" study. "E-Travel: from Explosion to Implosion" will follow, fol-low, presented by Henry Harteveldt, senior -analyst at Forrester Research. Each afternoon during the Forum, workshops will be held with that morning's presenters. The week ends with the Group Exchange, where resorts and lodging properties meet with more than 85 ski club and ski council representatives. The fact that the 2002 Winter Olympics will be hosted in this area is one factor for the Travel Symposium's first-ever move to a Utah resort. "The Winter Olympics will generate increased interest overall over-all in winter sports, and will hopefully hope-fully result in more winter vacations vaca-tions in the mountains," Pierson said. "Having the symposium in Park City, where a large number of the Olympic events will be held, has added a new dimension to our program this year." Local convention properties have reported that the following groups will meet during the week of Apr. 1 - 7 in Park City. Information is supplied by the Park City ChamberBureau. Group Auburn University Mountain Travel Symposi Liarys bki lours Rainfinity . Toastmasters Crystal Schools MTS Luncheon Great Harvest Family Church UVSC Karst - Bosse Wedding Iomega Abbott Labs Centicor Cradr Central Prep School Ski Franklin Templeton Resort Classic Galardi Group Glaxo Wellcom Rosenbluth Takeda Pharmaceuticals Ski Utah Coca-Cola Company Park City School District TOTAL: This is 48 percent of the number from the 0 GOLD MEDAL REALTOR SUSAN CATENACCI S When you are interested in buying or selling, call me for my expert real estate knowledge and service. Let My Success Be Your Success! 655-8574 susancxmission.com Ready to organize your Closets? Call the King! CLOSET KING Since 1987 Nowl Have twice the usable space in your closet.., or your garage, pantry, home office, or kitchen. Closet King Organizers are 100 guaranteed for as long as you own your home. EUROFLEX system provides maximum strength and flexibility. Unique steel suspension rail is much stronger and versatile and allows shelves and rods to be completely adjustable. 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