"For most European countries the spillover has restrained demand when activity was already generally quite weak, and when inflation was abating," the report said.

The Economy The Federal Reserve decided against any move to raise interest rates last month because economic growth was sluggish and inflation was abating.

But when inflation abated in the early 1980's, the diamond market collapsed.

"They believe that inflation is abating, but they want to see more signs of it."

By October 1950, inflation had abated and shortages were easing.

By early 1981, Schmidt faced the worst possible situation: growth fell and unemployment rose, but inflation did not abate.

But it said increases could resume if inflation did not abate.

But economic data released on Friday suggested that inflation may be abating while the economy continues to expand.

And as the currency appreciates and inflation abates, holders of that debt stand to make money.

A rise in unemployment, for example, could boost stock prices because the market decided that inflation would abate.