As gasoline prices hover near record highs, the Federal Reserve Board is expected to raise short-term interest rates again today — the eighth time the Fed has increased the rate since last June. Iowa Senator Chuck Grassley, chair of the Senate Finance Committee, says Fed chairman Alan Greenspan knows what he’s doing. Grassley says the Fed is trying to “balance between growth in the economy and overheating of the economy. I think they’ve been pretty good at it,” and he points to issues like the slow-downs of consumer spending and the manufacturing index. If rates are raised a quarter-point, the federal funds rate would climb to three-percent. Grassley says he will not be critical of the Fed’s actions. Grassley says there’s concern about inflation and the slowing of the economy, forcing the board to be very careful the nation isn’t sent back into a situation of “stagflation,” like in the late 1970s and early 80s with no economic growth and an inflationary spiral.
