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Morning NewsFosler: Market Declines Indicate Wall Street 'Looking for a Signal From the Fed'Aired January 5, 2000 - 9:31 a.m. ETTHIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. BILL HEMMER, CNN ANCHOR: Investors looking to see if stocks can rebound today. Yesterday's huge decline on Wall Street reverberated through overseas markets. Prices on the biggest European exchanges improved slightly from early trading when they were running between 1 and 2 percent lower. There was a major selloff, though, in Asian markets overnight. The Tokyo stock market, it suffered steep early losses before bouncing back just a bit. Prices hit the hardest, though, in Hong Kong. The Hang Seng Index dropped more than 7 percent. DARYN KAGAN, CNN ANCHOR: Joining us now to talk about the stock market and other money manners is the chief economist for The Conference Board. Gail Foster -- Fosler joins us this morning from our New York bureau. Good morning, or at least we're hoping it's a good morning. GAIL FOSLER, CHIEF ECONOMIST, THE CONFERENCE BOARD: Good morning, Daryn. KAGAN: Hope the bruises aren't too bad from yesterday. What, exactly -- in your view, what was going on with those big drops on Wall Street? FOSLER: Well, I think Wall Street's really looking for a signal from the Fed. It's very clear that the Fed was going to stand pat through the end of the year. Now the bears have kind of come out of their caves, there's a lot of talk about very large Fed rate increases. I don't think that's on the horizon, but the investors are certainly stepping to the sidelines. KAGAN: Well, in the middle of this dive yesterday, the president came out and said, Alan Greenspan, we'd like you to stick around another four years. Was that investor saying, Alan Greenspan and his interest rate hikes don't make us feel so good? FOSLER: No, I think, you know, Greenspan is really known as a rather cautionary leader in terms of monetary policy, and I think, really, the Fed's bias is toward raising rates. The likelihood is that we will see, I think, a 25 basis point increase in February, but I think we'll see a neutral bias. But investors don't know that now and I think they're not taking any risks. KAGAN: And your advice for investors today would be hang tight because the worse could be yet to come, or is this going to be like a shopping spree the day after Christmas? FOSLER: Well, I think there's certainly bargains out there, and there'll be bargains for the rest of January, and this is probably a good bargain-hunting period. KAGAN: All right, we will keep an eye on it. Gail Fosler, thanks for joining us this morning from New York. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com | ||||||||||||||||||||||||||||||||
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