Fed’s Bernanke to Assure Congress Higher Rates Not Imminent

After the Fed's decision of raising the cost of direct loans to commercial banks, there has been several expectations that the economy may sooner or later suffer from inflationary pressure, which could lead the Fed to increasing the benchmark interest rate. In order to rule out this possibility, the Fed chairman will probably assure the Congress and the public that an increase in the federal fund rate is not imminent.

Many Fed's officials state that tightening monetary policy is not going to happen unless there is a significant improvement in the prospect of the job market. They also emphasize that maintaining growth, rather than combating inflation, should be the main goal of policy makers. This is especially true after the recent report about Consumer Prices has been released. Core prices, which exclude highly volatile items such as food and energy, unexpectedly fell by 0.1 percent.