Caption: HENRY KAUFMAN, ONE OF THE NATION'S most influential private economists,sees virtuslly no chance that the new administration will make substantial progress this year in solving our "unprecedented inflationary problem." The U.S has become " a garrison-type economy." bsieged by forces and policies that "cannot be lifted quickly." Kaufman said in a speech at the University of Pennsylvania.NEW YORK--(AP)- Interest rates continued to climb toward record levels Tuesday, and Henry Kaufman, a leadingwall Street economist,said the surge is not over and that interest rates "will remain historically high" in 1981A Small NEW YORK bank raised its prime leading rate to 19.75 percent from 19 percent, closing in on the record 20percent rate of last spring. No major banks matched the increase.The latest leap in the lending rate for the most credit worthy of its corporate customers came from UMB Bank and Trust Co., a U.S. subsidiary of United Mizrahi Bank of Israel, which has often moved in advance of majorbanks.KAUFMAN,A PARTNER in Salomon Brothers investment house and one of Wall Street's most influential economists, said interest rates are likely to increase from current levels before there is any decline ."It is Very difficult to say how high is High, "he added he met with reporters to discuss his 1981 forecast for the financial markets.But Kaufman does not expect a return to recession.Kaufman cited a number of factors indicating inflation will continue at high levels.Among them wereWage settlements with average raises of 10 To 11 percent in 1981. up from nine to 10 percent in 1980Another boost in oil"prices, perhaps as 30 percent.Farm produce prices rising as much as 15 percent.Who is Henry Kaufman. anyway?FROM FAR away, the news from Washington and Wait Street is Contradictory, frightening and perversely hilariousThe news America each day, gathered from the international Herald Tribune and the British newspapers, has more ups and downs,more climaxes almost as much action and as many laughs as the 10-year old movie.Henry Kaufman says to sell bonds Wholesale prices are up: production output declines. Gulf buys cities serviceMexico may not repay its loans to the Bank of America. The market is down, interest rates are up- or was it theother way around? Now,Interest rates are down, the market is up. Mexico will repay -somehow. Gulf wont't buyCities Service. The London stock Exchange is up 21 points because of the "buying panic" on Walt Street. Henry Kaufman says to buy bonds.This could all seem quite confusing when a columnist is far from trusted sources on "the Hill" or 'the Street'.
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