
Federal Reserve Chairman Ben Bernanke
WASHINGTON (CNN) -- Federal Reserve Chairman Ben Bernanke testified Wednesday to Congress that the U.S. economy was in "a time of transition," marked by inflation concerns and slowing growth. (
Full story)
Bernanke noted that the first quarter growth rate of 5.6 percent has moderated, reflecting a cooling housing market and increased energy costs. Over the first five months of 2006, overall inflation was higher than the Fed had predicted, rising 4.3 percent, while the number excluding food and energy went up 2.6 percent.
The chairman's remarks tying together these two major points -- specifically, that slowing economic growth should limit price pressures -- invigorated Wall Street. Stock markets rallied as investors bet that the Fed was nearly done raising interest rates after a two-year rate-hiking campaign.