Straddling risky economic threats, the Federal Reserve likely will stand still this week on interest rates.

Fed Chairman Ben Bernanke and his colleagues, who open a two-day meeting today, are faced with stuck-in-a-rut economic growth along with inflation threats from rising prices for energy, food and other commodities. With concerns about inflation lingering, Fed officials are not inclined to cut rates further but have recognized that pushing rates up too soon could undermine an economy buffeted by housing, credit and financial woes.

Against that backdrop, the Fed is almost certain to hold its key interest rate steady at 2% when it wraps up its session on Wednesday. If that is the case, the prime lending rate for millions of consumers and businesses would stay at 5%. The prime rate applies to certain credit cards, home equity lines of credit and other loans.

Wall Street investors and a few economists believe inflation problems might force the Fed to start boosting rates in August or later this year. However, many others believe that is a situation the Fed would like to avoid, especially given that the housing market is still flailing and foreclosures are at record highs.

Mortgage rates are already rising, spurred higher by investors' concerns about inflation. And, those higher rates spell yet more headaches for the problem-plagued housing market.

In a string of speeches over the past few weeks, Bernanke and his colleagues have ramped up their tough anti-inflation talk to rein in inflation expectations of consumers, investors and businesses. If those groups think prices will keep on rising, they will act in ways that can worsen inflation.

And, Bernanke, in a rare public utterance for a Fed chief, sounded a warning against the slide in the U.S. dollar contributing to an unwelcome rise in inflation. He sought to use words, versus action, to bolster the dollar and try to lessen inflation pressures.

Consumer prices in the first five months of this year have risen at an annual rate of 4%, down from a 4.1% increase last year and the biggest jump in 17 years. Gasoline prices and oil prices have set a string of record highs. Gas has topped $4 a gallon, while oil prices settled at $136.74 a barrel.

With any luck, the Fed might be able to hold rates at current levels through the rest of this year and will not have to start to boost them until next year, some economists agree. That would give the economy more time to gain traction. The Fed is hoping that its series of rate cuts and the government's $168 billion stimulus package will help energize the economy later this year and into 2009. The Fed launched its rate-cutting campaign last September and ordered its most recent reduction in late April. Those lower rates take months to work their way through the economy, however.

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