--Retransmitting Story Initially Headlined 14:09 EST Tuesday
--Sees Chances First Quarter Contraction Less Than 50%
--Slowdown Doesn't Mean an End to the New Economy
--Consumer Spending in Good Shape Despite Hit to Stock Portfolios
--Fed Needs to be 'Aggressive,' and Has Been Aggressive

IRVING, Texas (MktNews) - Dallas Federal Reserve Bank President Robert McTeer said Tuesday afternoon he remains more optimistic about the longer term U.S. economic outlook than in the short term, but that he is less concerned about the current slowdown than he once was.
"I was concerned, but I'm more confident than I was," McTeer told reporters after a business luncheon in the Dallas suburbs.
Referring to flagging consumer confidence indicators in recent weeks, the Dallas Fed president said, "Consumers may be singing the blues, but they're still shopping."
"Other than his portfolio, the consumer is okay," McTeer added, in sounding a generally upbeat note. But he also qualified this assessment, saying, "I am a lot more confident in the long term of economic growth than in the short term," and that the main risk to the economy remains a decline in consumer spending.
McTeer, who is not a Federal Open Market Committee voter this year, told reporters after his speech on the economic outlook that he believes that despite an obvious slowdown in manufacturing, the chances of a contraction in first-quarter 2001 growth are less than 50%.
Long known as the Fed's "Lonesome Dove" for his advocacy of the so- called new economy and low levels of unemployment, McTeer also said he feels the current downturn has not signaled the end of the new era. The Dallas Fed president indicated that he would prefer to see less of a decline in employer payrolls than has been the case recently, noting, "I'd rather see employers hold on to workers than to shed them to make productivity look better."
He further expressed confidence in the economy's inventory adjustment process, saying that the speed with which inventories are drawn down bodes well for a quick rebound. "There ought to be an ode to the bar code," McTeer said.
Asked to comment on Fed policy and dodging a question about the Federal Open Market Committee's March 20 intentions, McTeer said, "The Fed needs to be aggressive," then pausing he added, "But it already has been aggressive."
He also repeated the common, but now somewhat dated mantra, "The Fed's primary goal is to keep inflation down." Commenting on recent surges in the inflation indexes which observers have attributed mainly to technical factors, McTeer said the indexes are still not as accurate as they could be, but that they are improving gradually.
McTeer declined to directly assess the tax-cut plan proposed by the Bush administration saying only, "The Fed will make no deals." He said the central bank's job is to "monitor" what happens to the economy as a result of any fiscal policy actions.
Also touching on trade issues, McTeer very generally noted that the North American Free Trade Agreement with Mexico and Canada has been successful beyond even the wildest expectations.