CSBJ Daily

The Associated Press

WASHINGTON - Federal Reserve Chairman Ben Bernanke signaled strongly today that further interest rate cuts are unlikely because of concerns about inflation.

High oil prices are a double-edged sword that can both put a damper on already weak growth and spread inflation, he said.

In remarks delivered via satellite to an international monetary conference in Spain, Bernanke said the Fed’s powerful doses of rate reductions that started last September along with the government’s $168 billion stimulus package, including rebates for people and tax breaks for businesses, should bring about “somewhat better economic conditions” in the second half of this year.

To help brace the economy, the Fed in late April dropped its key rate to 2 percent, a nearly four-year low, but hinted that could be the last reduction for a while. Bernanke drove that point home again today.

“For now policy seems well positioned to promote moderate growth and price stability over time,” he said.

The Fed’s juggling act has gotten harder. It is trying to right a wobbly economy without aggravating inflation. The Fed chief also raised his biggest public concerns to date about the impact of the weak dollar on inflation.

Many economists believe the Fed will hold rates steady at its next meeting on June 24-25 and probably through much, if not all, of this year. A few believe that inflation could flare up and force the Fed to begin boosting rates near the end of this year.