More Flat for Fed Funds Rate; Inflation Remains Bernanke's Main Concern. In his semiannual appearance, Federal Reserve Chairman Ben Bernanke told Congress yesterday that "With the level of resource utilization relatively high and with a sustained moderation in inflation pressures yet to be convincingly demonstrated, the FOMC has consistently stated that upside risks to inflation are its predominant policy concern." The Fed expects the economy to continue growing at around 2.5%, expects inflation to ease to 2%, and expects unemployment to remain at 4.75% in 2008. The Wall Street Journal's Fed watcher Greg Ip writes, "Don't expect interest rate cuts anytime soon.... [T]he Fed continues to see less risk to the overall economy than many investors fear." Money market mutual fund yields follow the Federal funds target rate, currently 5.25%, so cash investors can expect 5% yields to persist and the good times to keep rolling. The entire text of Bernanke's comments, along with the Fed's "Monetary Report to Congress", may be seen here.

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