Federal Reserve Chairman Alan Greenspan will go before Congress this week armed with data showing the US economy is solid and free of dangerous price pressures that could force rapid interest-rate rises.
The Fed chairman is to deliver his semi-annual monetary policy report to the Senate and US House of Representatives on Tuesday and Wednesday, likely assuring lawmakers recent signs of a slowdown are merely a lull and that rates need to gradually rise to keep the recovery healthy.
"I think we're going to see him patting himself on the back for having guided the economy through a weak period," said Richard DeKaser, chief economist with National City Corp in Cleveland.
"He's also going to say that there has been an impressive acceleration in growth and acknowledge Fed policy's role in making that happen," he added.
US central bank policy-makers already have begun reversing a series of rate cuts initiated in 2001 that took interest rates to 46-year lows.
The policy-setting Federal Open Market Committee raised the federal funds rate a quarter percentage point - to 1.25 percent - on June 30 but said future policy moves would come at a "measured" pace.
Economists see more quarter-point rate rises this year as the Fed weighs the momentum of price rises for key products like imported oil and assesses the impact of higher borrowing costs on consumer spending.
The Fed on Tuesday also will offer updated forecasts for inflation, economic growth and unemployment.
Lawmakers often use Greenspan's appearances to quiz him about big budget deficits, a central issue in the campaign for November's presidential election.
Greenspan has said repeatedly that while he sees deficits as dangerous, spending curbs - not tax increases - are the wisest way to fix them.
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