The press reacts to last nights speech by the new Fed chairman. "U.S. two-year Treasury note yields rose for a third straight day after Federal Reserve Chairman Ben S. Bernanke suggested that the central bank will continue to raise interest rates. Thirty-year bond yields fell as he also said low long-term yields don't signal an economic slowdown."

"Two-year yields rose above 10-year yields as traders increased bets on the number of times the central bank will lift borrowing costs."

"'We're a little bit more bearish than what's built into the market,' said Donald Ellenberger, who oversees about $5 billion of government and mortgage-backed securities. He said there is a 'decent probability' the Fed increases its target rate to 5.25 percent from 4.5 percent now."

"Bernanke said he doesn't interpret the narrowing gap between short and long-term rates as 'indicating a significant economic slowdown to come.' 'Many, many variables go into making the forecast,' and the yield curve alone is not 'by itself a useful benchmark for policymaking,' Bernanke said. He added the increase in mortgage debt from the housing surge of the last five years 'may not be a particularly serious problem' because families have replaced higher rate consumer debt with home loans."

"A slowdown in the U.S. housing market would still be entirely consistent with economic growth at or near potential, Bernanke said. 'There has not been but there may be in the future some stress in some areas, but broadly speaking I think that consumer finances are consistent with continued reasonable growth in consumption and enough to keep the economy at or close to its potential output growth rates,' Bernanke said."

"'This increase in mortgage debt may not be a particularly serious problem. First, there has been on the other side of the balance sheet, significant increases in assets, so that balance sheets in general are looking stronger,' he said."

"Bernanke said that, even if short-term interest rates rise, the impact on the growing number of people who hold adjustable-rate mortgages would occur with a lag since many of them have fixed-rate 'lock-in periods' of three, five or seven years before the adjustable feature kicks in. 'Our best estimates at the Federal Reserve are that the repricing of these instruments is actually going to take place relatively slowly,' Bernanke said." "He said U.S. saving rates were likely to rise over the next year or two, especially if housing prices moderate."

"Bernanke's comments yesterday showed he isn't worried about slowing growth, said Ethan Harris, chief U.S. economist at Lehman Brothers. 'He's continuing to be pretty bullish about the outlook for the economy,' Harris said yesterday. There's 'maybe a tiny bit more hawkishness here.'"