By Mark Felsenthal

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke looks set to tell Congress this week that the U.S. economy is sound, but that the central bank is still concerned that inflation, while moderating, may not fu"" >

 
Go to a Section:
Top Business News
Banking & Financial
Consumer Products
Health
Tech, Media & Telecom
Small Business
1:26PM EST, Sun 11 Feb 2007
You are here: Home > Business > Article

Bernanke to say economy sound, inflation a risk

Sun Feb 11, 2007 12:44PM EST
Email This Article | Print This Article | Reprints
[-] Text [+]

By Mark Felsenthal

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke looks set to tell Congress this week that the U.S. economy is sound, but that the central bank is still concerned that inflation, while moderating, may not fully come to heel.

In two days of testimony on the Fed's semiannual monetary policy report on Wednesday and Thursday, Bernanke can boast that the central bank's interest-rate strategy appears to have put the economy on track for a ""soft landing"" in which growth slows just enough to keep inflation at bay.

At the same time, he will caution lawmakers -- and financial markets -- that a low-inflation outcome is not yet assured, and that the central bank stands ready to raise benchmark interest rates above their current 5.25 percent level to squelch bubbling price pressures if necessary.

The Fed has held overnight borrowing costs steady since June, when it put in place the last of 17 straight rate increases.

After their last meeting on January 30-31, Bernanke and his colleagues indicated concern that a tight labor market might make it difficult to bring inflation down. The U.S. jobless rate stood at a historically low 4.6 percent in January.

""With the low unemployment rate, he remains concerned that core inflation might pick up again after having slowed a bit recently,"" said Maury Harris, chief U.S. economist for UBS in New York.

'UPBEAT ASSESSMENT'  Continued...

 

© Reuters 2007. All rights reserved.

Reuters Pictures

Editors Choice: Best pictures
from the last 24 hours.
View Slideshow

Most Viewed Articles

Insights

Wireless industry to focus on growth at trade show Fri Feb 09, 2007 01:56PM EST

AMSTERDAM (Reuters) - Riding the wave of demand for mobile communications in developing countries and finding new ways to make money from maturing markets will be preoccupations at the world's top wireless trade show, 3GSM, in Barcelona.  Full Article 

1. AAPL
2. GOOG
3. MSFT
4. GE
5. SIRI
  6. CSCO
  7. DELL
  8. INTC
  9. SI.N
10. MOT

Reuters.com:  Help  |  Contact Us  |  Advertise With Us  |  Mobile  |  Newsletters  |  RSS  |  Widgets  |  Interactive TV  |  Labs  |  Site Index

Reuters Corporate:  Copyright  |  Disclaimer  |  Privacy  |  Products & Services  |  Professional Products Support  |  About Reuters  |  Careers

 

International Editions: Arabic  |  Argentina  |  Brazil  |  Canada  |  Chinese Simplified  |  Chinese Traditional  |  France  |  Germany  |  India  |  Italy  |  Japan  |  Latin America  |  Mexico  |  Russia  |  South Africa  |  Spain  |  United Kingdom  |  United States

 

Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Reuters journalists are subject to the Reuters Editorial Handbook which requires fair presentation and disclosure of relevant interests.