AMERICA'S central bank sent a clear message this week. For the second consecutive meeting, the Federal Open Market Committee, the central bank's policy-making committee, left short term interest rates unchanged at 1.75%. But it said that the risks facing the economy had shifted from economic weakness to a balance between weakness and excessive growth. This shift surprised no one. But it has convinced many people that interest rates are set to rise again—and soon. Judging by prices in futures markets, investors are betting that short-term interest rates could start rising as early as May, and will be 1.25 percentage points higher by the end of the year. That may be excessive. Economists at Goldman Sachs, who long argued that the central bank would do nothing this year, now expect short-term rates to go up only 0.75% this year, starting in June. But virtually everyone reckons some Fed tightening is in the offing. The reason? After an unprecedented 11 rate-cuts in 2001, short term interest rates are abnormally low. As the signs of robust recovery multiply, analysts expect the Fed to take back some of the rate-cuts it used as an 'insurance policy' after the September 11th terrorist attack. They think there will be a gradual move from the Fed's current 'accommodative' monetary stance to a more neutral policy. And a neutral policy, many argue, ultimately implies short term interest rates of around 4%. Logical enough. But higher rates could still be further off, particularly if the recovery proves less robust than many hope. Certainly, recent economic indicators have been extraordinarily strong: unemployment fell for the second consecutive month in February and industrial production rose in both January and February. The manufacturing sector is growing after 18 months of decline. The most optimistic Wall Streeters now expect GDP to have expanded by between 5% and 6% on an annual basis in the first quarter. But one strong quarter does not imply a sustainable recovery. In the short term, the bounce-back is being driven by a dramatic restocking of inventories. But it can be sustained only if corporate investment recovers and consumer spending stays buoyant. With plenty of slack capacity around and many firms stuck with huge debts and lousy profits, it is hard to see where surging investment will come from. And, despite falling unemployment, America's consumers could disappoint the bulls. These uncertainties alone suggest the central bank will be cautious about raising interest rates. Indeed, given the huge pressure on corporate profits, the Federal Reserve might be happy to see consumer prices rise slightly. In short, while Wall Street frets about when and how much interest rates will go up. The answer may well be not soon and not much. The purpose of the author in writing this text is to