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Execs: what inflation?
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May 7, 1999: 9:01 a.m. ET
At annual Business Council meeting, CEOs see rosy economic outlook
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NEW YORK (CNNfn) - Greenspan who?
A day after the Federal Reserve Chairman Alan Greenspan warned that tightening labor markets could bring on increased inflation, the heads of the nation's largest companies had a vastly different take on rising prices.
At an annual meeting of the Business Council in Williamsburg, Va., chief executives of 300 large corporations say inflation this year should stay tame.
In a survey, the executives see inflation rising a mild 2.1 percent. While that's higher than l998's 1.6 percent climb in the Consumer Price Index, it's low by historic standards.
The CEOs' view seems at odds with Greenspan's remarks Thursday. The Fed chief's comments in Chicago sent prices in the inflation sensitive bond market falling, sending the yield on the 30-year Treasury bond to an 11-month intraday high of 5.80 percent.
In the rest of the survey, the executives see growth slowing to a 2.8 percent rate, down from 1998's 3.9 percent rise in gross domestic product. Longer-term interest rates will inch up, the executives said.
Productivity, meanwhile, will continue to climb, aiding by further advances in technology. The executives see Japan and Brazil recovering from recession.
This view already has been reflected in the stock market, where cyclical stocks poised to gain from increased worldwide demand have climbed.
In an interview with CNN Financial News, U.S. Deputy Treasury Secretary Lawrence Summers, who was attending the Williamsburg gathering, welcomed this apparent turnaround abroad.
"The United Sates economy can't be an oasis of prosperity," he said.
Still, he cautioned against complacency at a time when the economy continues to grow and consumer confidence remains sky-high all amid surprisingly low inflation.
Complacency "leads to much capacity creation, too much extension of credit. That's when mistakes happen," Summers said. "Large challenges remain." 
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