Fed's Santomero says 'open question' whether more rate cuts are needed

PHILADELPHIA, PA (AFX) - It remains an "open question" whether the Federal Reserve Board will need to cut rates further to put the U.S. economy on a growth path, according to Anthony Santomero, the president of the Philadelphia Federal Reserve Bank.	    "In the coming months, the impact of the easing steps we have already taken will slowly ripple out into the economy. Whether additional steps will be required is an open question," Santomero said in a speech prepared for delivery to a luncheon with Philadelphia Financial Analysts.	    "Fortunately, the underlying rate of inflation is not accelerating, and long-term inflation expectations appear contained. Should further unexpected weakness in spending materialize, the Fed has the latitude to again respond quickly and effectively - just as I believe we have done in the past four months."	    Santomero said economic growth remains "much too sluggish," and added that he expects that growth "will remain unacceptably slow throughout the first half of 2001."	    A key determinant of the future success of the economy is confidence, Santomero noted.	    He said by the end of the first quarter, "overall moods seemed to have improved" but said "we have a way to go before confidence is restored to a level consistent with the economy's potential for growth."	    "This means that the risks to the economy are still on the side of weakness, so the Fed must remain vigilant and be prepared to act if necessary." 

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