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FED SHOULD FOCUS ON ECONOMY BEFORE INFLATION, INVESTMENT CHIEF SAID

FED SHOULD FOCUS ON ECONOMY BEFORE INFLATION, INVESTMENT CHIEF SAID
 CHICAGO, June 15 /PRNewswire/ -- A national investment management leader has added his voice to the call for Fed action to lower rates, saying it's more important to address the immediate problem of sluggish economic growth than the distant threat of inflation.
 While The Federal Open Market Committee reportedly has agreed to end its bias toward easing, "Chairman Greenspan has the authority (and rationale) to reduce rates slightly," said Robert D. Milne, president of Duff & Phelps Investment Management Co., in his firm's latest report on investment conditions.
 The economy's growth rate isn't rapid enough even to absorb labor force expansion, and the level of consumer confidence needed for a faster recovery will remain inadequate until both unemployment and debt burdens ease, Milne said in June's edition of "The Investment Outlook."
 "The main problem thus far is that an annual growth rate of 2.5 percent is needed simply to absorb growth in the labor force plus productivity gains," Milne said in his report. "Since the recovery has been proceeding at a slower pace than this, the unemployment rate has been discouragingly high."
 In addition, Milne pointed out that 1991's net private investment was less than two percent of last year's GDP, which is only one third the amount required for reasonable growth. Prospects for improvement are questionable, the investment and economic expert said, because the federal deficit is absorbing two-thirds of all net savings by individuals and businesses. Foreign capital is no longer available to finance the deficit.
 However, economic growth should improve within the next six to nine months according to trends in the leading indicators, Milne said.
 Also in the report, Milne observed that the broad stock market averages are now close to their year-end 1991 levels and that the bull market is 21 months old.
 Duff & Phelps Investment Management Co., headquartered in Cleveland, is one of four financial service businesses that constitute Chicago- based Duff & Phelps Corp. The organization also maintains a nationally recognized public credit rating company and widely known investment research and financial consulting businesses.
 -0- 6/15/92
 /NOTE TO EDITOR: For a copy of the report contact Bob Milne at 216-771-3450 or Jackie Bitowt, corporate director of communications, at 312-630-4624./
 /CONTACT: Robert D. Milne, president of Duff & Phelps Investment Management, 216-771-3450/ CO: Duff & Phelps Investment Management Co. ST: Illinois IN: FIN SU: ECO


SM -- NY069 -- 0271 06/15/92 15:03 EDT
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Date:Jun 15, 1992
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