Fed Chairman Alan Greenspan might like to boost them more to head off any future inflation, but he will likely fear that that would worsen the impact of Asian troubles on U.S. financial markets. Though most of the Oct. 27 drop in the stock market was recouped the next day, prices have remained volatile. Weinberg, meanwhile, sees a silver lining in market volatility. That might help keep consumer spending and debt from climbing at inflationary speed. Longer-range, the worries for the U.S. economy are more global than homegrown.
Japan is the major world trouble spot.
Since 1990, it has suffered from sluggish output growth, a stock-market depression and a credit crunch. Now chaos in Southeast Asia endangers Japan's exports and loans to the area. Another big imponderable is the likely effect on European and world economies of the scheduled 1999 replacement of 10 to 12 European national currencies by a common unit of money, the euro. On the more parochial subject of the effect on U.S. business, Hormats thinks the switch to a common currency will reduce costs enough for European companies to make them more competitive with American firms. But Zimmerman believes the effects on balance will be favorable.