Bermuda is unlikely to see a steep rise in interest rates soon if US interest rates stay on the low side, according to the Chief US Economist for HSBC Securities.

Ian Morris is attending the Pengrowth conference which concluded yesterday at the Fairmont Southampton Hotel.

While in Bermuda Mr. Morris will be hosting a presentation for senior Bank of Bermuda managers and clients on ?US Economies: Skating On Thin Ice?, addressing the outlook for the US economy, hurricane Katrina and waning consumer confidence.

?One can expect a moderation in the business cycle, times have been good generally in the US. To some extent that has been influencing conditions in Bermuda,? Mr. Morris said.

?For the reinsurance industry things are changing given Hurricane Katrina but we don?t expect a US recession.?

?The challenge we face is the energy shock that post-Katrina and now with the threat of Hurricane Rita, suggests is going to be an issue. Already gasoline prices are so high that consumers are feeling the pinch.

?This may act to slow down growth initially in the second half this year. A longer concern going into 2006 is that consumer confidence has now plunged to the lowest since the early 1990s.

?This may continue to keep lower consumer spending through 2006 even though we will get a fiscal boost in the form of post-Katrina rebuilding so we think Growth Domestic Product may end up being lower than people were expecting, perhaps three and half percent.?

He said another puzzle is that despite an inflation rise due to higher oil prices, core inflation remains unusually low and its helping to keep long term interest rates low in the long term in the US.