Fed pause soon.

<P> U.S. Federal Reserve Board (Federal Reserve, referred to as the Fed) the • Bernanke (Ben Bernanke) suggests that although economic growth remains strong, a moderate increase in inflation, but the Fed is prepared to end in the near future rate hike cycle. .</ P> <P> Bernanke in the U.S. Congress Joint Economic Committee (Joint Economic Committee of Congress) made a speech that still continue to rise despite inflation risks, but optimism about the economic outlook. .Bernanke said that even if there is still such a risk, but the Fed at some future time, may be one or more meetings of interest rate action is not to allow more time to gather information about the economic outlook. .</ P> <P> He said that a pause should not be interpreted as a rate cut or even a prelude to a long time to stop raising interest rates. .He said that in a meeting, no action at subsequent meetings did not rule out the possibility of action on, if necessary, Fed will not hesitate to take action. .Some economists expected, Fed will pause and then resume raising interest rates in the fall. .</ P> <P> Bernanke did not set a timetable for pause, but the most likely time should be in June. .15 consecutive Fed rate hikes, short-term interest rate target from June 2004 to 1% to the current 4.75%. .Fed 3 28 in minutes of the meeting, Fed officials believe that may just add in the May 10 interest rate once, to raise interest rates to 5%. .</ P> <P> Since then, home sales, durable goods orders, employment and strong consumer confidence report and a moderate increase in the inflation rate so that investors may once again that the June rate hike. .But Bernanke said the data released after the last meeting did not essentially change the Fed's assessment of the economy. .</ P> <P> Bernanke's speech that the futures market that June will raise interest rates to 5.25% of the probability from more than half to about one-third. .Bond yields and the dollar fell. .</ P> <P> Bernanke stressed that the future depends on future interest rate actions data. .Lehman Brothers (Lehman Brothers) economist Drew • Matu Si (Drew Matus) predicts the future data will not pause to the Fed the opportunity. .He said the economy has become overheated, do not expect significant cooling. .He expects short-term interest rate target to 5.5% in September. .</ P> <P> the past, the central bank often pause at the same time reiterated publicly that "tendency" in tightening policy, that the next change in interest rates is likely to be increased, not decreased. .Bernanke's remarks that the Fed might do the same. .</ P> <P> Bernanke said, our current assessment of the risk of inflation may now be more important. .But he hoped that the idea of a pause, he thought Fed would soon raise interest rates enough to increase the risk of inflation is not level, and further interest rate increases will have significant risk of hampering economic growth. .</ P> <P> Fed expected in recent months has been in a strong first quarter, an annualized rate of economic growth will be reduced to 3% to 3.5%, slightly less than 2% at present .inflation rate will remain unchanged. .Bernanke's view is: reasonable to expect that the economy will gradually fall back to more sustainable growth level. .He seems to March existing home sales strong unmoved, warning that future housing sales downturn there are still higher than expected risk. .</ P> <P> he said, still exists the possibility of inflation, because almost no excess capacity, firms may be more than before the rise in energy and raw material costs onto consumers. .But he also said that inflation expectations are still not high. .</ P> <P> addition, Fed member Donald • Cohen (Donald Kohn) said that the past two years, despite strong growth in business investment, but consistently lower than expected, and the reasons are not clear. .He said he did not see a substantial growth in the recent signs of investment is expected to be steady growth in final demand and relatively low capital costs to support these favorable fundamentals, strong capital spending will continue to rise. .</ P>.