As Federal Reserve Chairman Ben S. Bernanke prepares to deliver his first economic address in two months, the central bank's optimism that inflation is abating and growth will start to pick up has been dashed by the unexpected surge in oil prices.

The 13 percent jump in crude oil since policy makers last met in April is eroding the potential benefit to the economy from more than $100 billion in federal tax rebates. At the same time, soaring energy costs have spurred an increase in inflation expectations that's getting the attention of Fed officials.

The delay in the economic rebound, coupled with the worsening price outlook, indicates the Fed will keep its benchmark interest rate unchanged after 3.25 percentage points of reductions since September.

``They're pretty firmly on hold,'' said Ethan Harris, chief U.S. economist at Lehman Brothers Holdings Inc. in New York. ``It's just bad news for the economy to have the Fed's hands tied here by the higher energy prices at a time when there's still plenty of risks in the outlook.''

Officials said after their April meeting that inflation will ``moderate in coming quarters'' and the seven interest-rate cuts since September will revive the economy.

Bernanke, 54, is scheduled to speak via satellite to the International Monetary Conference after 9 a.m. Washington time. He will participate in a panel with European Central Bank President Jean-Claude Trichet, Bank of Japan Governor Masaaki Shirakawa and Bank of Spain Governor Miguel Fernandez Ordonez.

First Since April

The chairman's last full speech on the economic outlook came April 2 in testimony before Congress's Joint Economic Committee. He said at the time that ``monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year.''

Soaring oil costs, which officials consider to be a function of supply and demand rather than speculation or the result of lower interest rates, may reduce the likely rebound in growth in the second half. Crude oil has climbed 93 percent in the past year, reaching a record $135.09 a barrel on May 22.

That has also pushed gasoline prices to unprecedented levels, damaging the outlook for consumer spending that's already been hit by a slump in home values.

The house-price drop may not be over with declines likely to continue into next year, former Fed chief Alan Greenspan has said. Values are down 17 percent from their July 2006 peak, according to the Standard & Poor's/Case-Shiller index of prices in 20 major metropolitan areas.

Congressional Bills

Bernanke told lawmakers April 2 he supports congressional efforts to ``address'' the housing crisis. He has stopped short of endorsing any specific legislation, and hasn't advocated a second fiscal stimulus plan after the $168 billion package enacted in February. Democratic and Republican senators last month approved a bill offering $300 billion of federal mortgage insurance to help stem foreclosures.

House prices may be the most important variable for the economy because of their impact on consumer spending and financial markets, economists have said.

The U.S. economy grew at an annualized 0.9 percent pace in the first quarter, capping the weakest six-month performance in five years, government figures showed last week.

Yesterday, Atlanta Fed President Dennis Lockhart said the U.S. economy is poised for a ``gradual'' recovery after a slow first half, with inflation likely to moderate from ``uncomfortable'' levels.

`Balanced' Risks

Minutes of the Federal Open Market Committee's April 29-30 meeting indicated policy makers judged that risks were more closely ``balanced'' between weaker growth and faster inflation.

Those risks may now be more tipped toward inflation. Last week, the Reuters/University of Michigan consumer sentiment survey showed Americans projected prices would increase 3.4 percent over the next five years, a 13-year high.

``It is pretty clear that the Federal Reserve has interest rates about as low as they need to go,'' Marvin Goodfriend, a former Richmond Fed policy adviser who is now at the Tepper School of Business at Carnegie Mellon University in Pittsburgh, said in a Bloomberg Radio interview.

Bernanke may be asked today about the central bank's commitment to lend to investment banks, after Vice Chairman Donald Kohn last week indicated the Fed was open to keeping a temporary program.

Fed officials are starting to engage Congress on longer- term options for any direct loans to the firms. The Fed started the Primary Dealer Credit Facility in March to prevent the type of run that nearly sent Bear Stearns Cos. to bankruptcy.

Securities Dealers

Discussions may address the kind of information and authority the Fed would need if it decides to keep the program. The Fed invoked emergency powers not used since the Great Depression, and under current laws must close the facility once markets normalize. On March 16, the central bank said the resource would remain open until at least September.

Legislation giving the Fed with new supervisory powers could take months to enact. In the interim, the Fed may request it keep investigators at the investment banks. The SEC and Fed are working on an information-sharing agreement, according to SEC spokesman John Nester.