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Twenty-one years ago, Daniel E. Laufenberg came to Salt Lake City to interview for a job on the faculty of the University of Utah. He didn't get it, but he has no hard feelings. In fact, he's grateful - "Tell them thanks for me," he quips.

That's because Laufenberg thinks his career path worked out for the best: A stint at the Congressional Budget Office researching financial markets, 14 years on the research staff of the Federal Reserve System and his current position as chief economist for IDS Financial Services, a subsidiary of American Express.A subsidiary for now, that is. The IDS office in Salt Lake City - the nation's largest with 41 financial planners on staff - is one of three cities nationally that will undergo a change to a new corporate identity: American Express Services Corp., offering American Express Personal Financial Planning.

Meanwhile, Laufenberg goes on doing what economists do best - explaining and forecasting.

Regarding the latter, he says the Dow Jones Industrial Average of stocks could "get close to 4,000" by the end of the year, a fairly optimistic forecast considering the dire predictions that the market "bears" have been making since February, when the first of four Fed hikes in interest rates began.

"This doesn't feel like a bear market," says Laufenberg. "It feels more like a normal correction."

Often, he notes, stock and bond prices tend to go in divergent directions, but this year stocks have been following bonds . . . down.

"Eventually, you will have a breakout from this trend but I don't know when," said Laufenberg. When that happens, investors in stocks will once again return to earnings, rather than interest rates, in determining the value - and thus the stock price - of companies.

"Wall Street doesn't like inflation and anytime the economy looks like it's going faster than it should, the Street gets nervous."

And since the Fed looks down that same road - and raises interest rates - investors assume governors of the nation's central bank must see something they do not. But Laufenberg doesn't credit his former employer with that much vision. "I don't think they (Fed governors) know any more than we do," he said.

Some further thoughts of Laufenberg on the economy:

- Housing will continue to do well through the rest of the year, led by multi-family construction. Single-family homes have probably "plateaued" because rising mortgage interest rates will dampen sales.

- The Fed's next bump-up in interest rates will probably come in early July, but since everyone is expecting it, the markets likely won't go into a tail spin as it did when the rate hikes began in February.

- The Federal Reserve was created by Congress and many legislators have been so angered by the Fed hiking interest rates that there has been talk of stripping the central bank of its independent authority to determine monetary policy. Won't happen, said Laufenberg. "Politicians have to look at things in the short term while the Fed can take the long view. The Congress knows this, and while they may not always like it, they won't change it."

- The average economic expansion lasts four years and we are in the fourth year of the current expansion so some upward pressure on prices - inflation - is to be expected. But don't look for anything dramatic, such as we experienced in the 1970s."

That's because OPEC has lost its power to push crude oil prices through the roof, as it did in the '70s, causing double-digit inflation. "Cartels never endure and OPEC's day has come and gone. They shot themselves in the foot and now they are totally ineffective."

- California's economy is still weak but remains the 10th largest in the world. "California was on the defense-spending gravy train so it suffered when spending was cut. But I think the state has bottomed out and is now on its way back."