Alan Greenspan, chairman of America’s Federal Reserve, goes to Capitol Hill this week to give Congress his latest assessment of the economic outlook and its implications for monetary policy. The latest government figures suggest he was right to be cautious about the speed of America’s turnaround, The Economist is reporting today.

Disappointing sales. Prices rising. Is America’s golden recovery already tarnished? It depends, of course, on quite how strong a rebound you expected from last year’s recession. But although new data released on April 12 were quite disappointing—retail sales growing more weakly than expected, producer prices rising faster—they do not, of themselves, justify too great a mood swing. Indeed, they may help Alan Greenspan and his policymaking colleagues at the Federal Reserve—America’s central bank. Greenspan goes to Congress on April 17th to testify before the Joint Economic Committee about the economic outlook and its implications for monetary policy.

This is code for the question: what is going to happen to interest rates? Greenspan is not going to answer that question—no central banker would. Given his cautious nature, he is unlikely even to give out many hints. But most economists and Fed-watchers are agreed now that the next move in rates will be upwards. This is bound to come as something of a shock to the millions of Americans who last year got used to a central bank that cut rates every time it met, and sometimes in between meetings as well. Interest rates fell eleven times during 2001 in an unusually aggressive campaign by the Fed to provide a monetary cushion for an economy which had gone into a nosedive.

The Federal Reserve posts information on its monetary-policy decisions. The American Bureau of Economic Analysis and the Institute for Supply Managament provide GDP and purchasing figures. The Conference Board posts more statistics on the US economy. The Bureau of Labor Statistics provides a snapshot of the American economy in figures.

All good things come to an end, though, and by early this year it had become apparent that the American economy was over the worst. Even when they take place against a background of economic buoyancy, rising interest rates are never popular (except with savers). So the Fed has, albeit very obliquely, started to prepare the ground for a shift in policy. Rates have been kept on hold since last December. At its meeting on March 19, the Federal Open Market Committee, the policymaking body which actually decides on rate changes, subtly shifted its stance to “neutral”: meaning it considered future risks to the economy equally weighted between inflation and economic weakness. Until then, economic weakness had been the Fed’s main concern, and had been so since December 2000.

Turning points are always the most difficult for policymakers to spot and then react to appropriately. When the American economy fell off a cliff at the end of 2000, Greenspan was quick to see the need for urgent action. He knows he must make an equally careful judgment as the economy picks up. Too precipitate a rise in interest rates could undermine a fragile recovery. Too much hesitation could, eventually, start to stoke up inflation.