He Fed is not going to see inflation as a threat

A separate survey on consumer confidence showed that U.S. inflation expectations five years then retreated to 2.9 percent from 3.2 per cent, another indicator tracked by the Fed officials.

"The Fed is not going to see inflation as a threat, so they can keep interest rates low longer," said David Wyss, Chief Economist at Standard and Poor's New York.

The Central Bank next reviews its path of politics on 26 and 27 April. Dealers expect its bond purchases at the end of this summer, but in a poll of Reuters they forecast no increase in fare before the first quarter of 2012.

On the contrary, the people's Bank of China, the Central Bank has boosted interest rates four times reference from October last year and has asked the country's major lenders to freeze the record 20 percent of their deposits.

Dong Tao, China's Chief Economist for Credit Suisse, expects to resume tightening in the second half of the year and the offer rate banks on deposits for a year to climb another 1.5 percentage points by the end of the year.

"In our opinion, China is not near the end of the current tightening cycle. Food inflation is transitory, but service inflation and wage inflation are structural, "he said.

That makes hope ill for Western economies which are large buyers of goods assembled in China. If imported inflation keeps climbing, central bankers must press down prices domestically generated if they hit their inflation targets.
"The big news in these numbers is greatly, that core inflation rose," said Nick Kounis, an analyst at ABN Amro. "Although we expect an increase in the rate during the July meeting, the balance of risks is inclined towards a previous move".

In the United States, consumer prices increased by 0.5 percent in March to record a rate of 2.7% year-over-year. But the core rate, which excludes volatile food and energy and is more closely monitored by the Fed, inched up only slightly by 0.1 percent to a rate of tame year-over-year by 1.2 percent.