Bill Clinton: “Well, I have two reactions. First of all, there is still no evidence of troubling inflation in this economy, but there…”

“Well, I have two reactions. First of all, there is still no evidence of troubling inflation in this economy, but there is a lot of evidence of growth. And in the last couple of weeks we've seen even more evidence of growth in the economy, for example, big backlogs on automobile orders. When you have growth in the economy, normally short-term interest rates go up. The estimates are that inflation will be around 3 percent. Historically, short-term interest rates have been about three-quarters to one percent above the rate of inflation. So, this is still within the range of interest rates that should not do anything to harm the economic recovery. And I can only guess that that had something to do with--the signs of economic growth have been very strong in the last couple of weeks, and that the interest rates at 3.5 percent were still only a half a point above the inflation rate, so that's the real interest rate. So I don't think it's cause for real alarm; I wouldn't say that. But on the other hand, what normally triggers interest rates going up is some evidence of inflation. We don't have that. So we'll just have to watch this. But I think it would be a real mistake to overreact. This is a very strong economy; it's very healthy. We've got good growth.”