Predicting the future is an elusive art. It is especially so at this juncture in time. In the short run, many forecasters are predicting that the present historically long expansion will continue into the next several quarters. However, there are areas of increasing concern that may lead to recession. Inflation, the possibility of foreign trade conflicts, the federal deficit, the tightening of monetary policy, and rising interest rates are an intertwined set of variables that have the capacity to end this expansionary phase of the business cycle. Continued attention needs to be given to this set of variables. During the first quarter, the national economic expansion was surprisingly strong. However, the economy has become somewhat more precarious since late last year.

     Considering the effect of national events on the regional economy, the local long ­term forecast is uncertain. However, prospects for the region in the short run continue to be bright. Leading economic indicators at the national and regional levels are up at the end of March. Regional industries also are expected to have a profitable year. The declining dollar and the firming of farm prices should contribute to maintaining the local business expansion at least during the next quarter.