The year-2000 computer problem will not have a significant effect on the economy's growth, a group of bank economists predicted Wednesday.
"The good news is, we're predicting solid growth despite the millennial changeover," said Wayne Ayers, chief economist at BankBoston Corp. and the chairman of the American Bankers Association's Economic Advisory Committee. "The fundamental law of supply and demand will not disappear on Jan. 1, 2000. Businesses will continue to deliver what customers demand."
The eight-member committee said it expects the Federal Reserve to raise the federal funds target rate by at least 25 basis points, to 5%. The Fed's monetary policy arm, the Federal Open Market Committee, is scheduled to meet next Tuesday and Wednesday.
That should push the prime rate up from 7.75% to 8.13% by yearend, according to the committee. But they predicted it would fall back to 8% early next year.