Reply #15: Fed not convinced on need for June rate rise -WSJ

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http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-04-17T023128Z_01_T349808_RTRIDST_0_ECONOMY-FED-WSJ.XML

TOKYO, April 17 (Reuters) - Some Federal Reserve officials are not convinced of the need to raise interest rates beyond a widely expected increase at its next policy meeting in May, the Wall Street Journal reported. Greg Ip, the Journal's Fed correspondent who is seen as sometimes reflecting the views of top central bankers, said that while markets have priced in better than 50 percent odds of a rate increase in June, "not all Fed officials are convinced".

Ip cited recent speeches from Fed governors Donald Kohn and Susan Bies as suggesting the Fed is approaching a near-term pause in its run of credit tightening that has boosted the fed funds rate to 4.75 percent from 1 percent since June 2004.

Bies told reporters after a speech last week that "everyone agrees we are getting closer to the stopping point".

Even though investors read the Fed's policy statement after the central bank's March meeting as pointing to more rate rises, Fed officials meant to convey an inclination, rather than a commitment, about any action in May and weren't trying to send any signal for June, Ip said.

Traders said the dollar slipped and U.S. Treasuries edged higher on the report, published on Friday when U.S. markets were closed for the Good Friday holiday.

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