Fed's 'New' Policy Is Working, UBS' Harris Contends

ByJohn S. McClenahen Although bond markets have been disappointed, the U.S. Federal Reserve's "new" -- since May -- policy of preempting price deflation is working, contends Maury Harris, chief U.S. economist at UBS Investment Research, New York. The proof? An economy that has been doing better and a stock market that has been higher during the past three months, Harris states. "Insofar as the Fed's 'preemptive attack' on deflation lessens deflation worries, we believe the 'new' Fed policy should be a plus for business planning, financing and spending," says Harris.