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Wednesday, July 18, 2007

Bernanke Predicts Stronger Growth, Slowing Inflation

" Federal Reserve Chairman Ben S. Bernanke predicted American economic growth will pick up "a bit'' next year and inflation will recede.

"The U.S. economy appears likely to expand at a moderate pace over the second half of 2007, with growth then strengthening'' in 2008, he told the House Financial Services Committee in Washington. "Core inflation should edge a bit lower, on net, over the remainder of this year and next year.''

Bernanke is trying to steer the economy through the worst housing recession since 1991, and he expects the slump in construction to continue to "weigh'' on growth. Inflation, which for three years exceeded the preferred range of several officials, remains ``the predominant policy concern.'' Earlier today, the Labor Department said consumer prices rose 0.2 percent last month, the smallest gain in five months.

The chairman, whose remarks suggested the central bank won't rush to either raise or lower interest rates, also took an additional step on consumer protection by promising tougher rules on mortgage lending. "

Source: Bernanke Predicts Stronger Growth, Slowing Inflation (Update5) (http://www.bloomberg.com/apps/news?pid=20601087&sid=aDqXHV5ojNEc&refer=home)