FED WATCHERS SEE U.S. ECONOMIC, INFLATION UPTURN This year will see a pickup in U.S. economic growth and inflation, the Shadow Open Market Committee said in its semi-annual policy statement. The SOMC, a group of basically "monetarist" private economists, said that "economic growth will accelerate in 1987 in response to powerful stimulative actions by the Federal Reserve." The group said the Fed's actions have been excessive. As a result, it said that "inflation and ultimately another recession now loom on the horizon." The SOMC said that central bank policies that rely on progressively larger swings in monetary expansion will not lead to sustainable economic growth and stable prices. The group made no specific nominal forecasts of economic or inflation growth in its policy statement. However, the Committee at its Sunday policy-making meeting said it was basically in accord with projections by Jerry Jordan, who is a member of the SOMC and economist at First Interestate Bancorp. Jordan expects real GNP growth to be about one percentage point higher than in the past two years. He expects consumer prices to rise about 4-1/2 pct this year. The SOMC said in recent months rapid money growth has been a principal cause of the devaluation. To avoid another costly inflation and disinflation, the SOMC urged the Fed to "abandon its inflationary policy and set the growth rate of the monetary base on the path toward sustained lower inflation." The Fed in February said it would no longer target the narrow M-1 money supply because the link between M-1 and economic growth has been largely severed.