The Federal Reserve appears close to achieving the tricky manoeuvre of steering the US economy to a soft landing.
That is the growing view of economists who believe first-year chairman Ben Bernanke and his colleagues are nearing the goal of slowing economic growth as a way of lowering inflation pressures while making sure the slowdown doesn't become something more severe such as a recession.
It is widely expected that the Fed will hold a key interest rate unchanged at its last meeting of the year today. Many economists believe it could be the middle of 2007 before the Fed moves rates again if the economy performs as expected.
Concerned that inflation could get out of hand, the Fed raised a key interest rate 17 consecutive times from mid-2004 through June of this year, pushing the federal funds rate to 5.25 per cent, up from a 46-year low of 1 per cent.
But since August, the Fed has held meetings in August, September and October in which it left rates unchanged as it monitored the impact the long string of rate hikes was having.
Mr Bernanke last February succeeded Alan Greenspan, who stepped down after 18-and-a-half years as Fed chairman.
During that period, Mr Greenspan steered the economy into soft landings including a decade-long economic expansion from 1991 until early 2001 that is the longest in US history.
Agencies