Markets continue to look to look to Alan Greenspan for direction. A letter released by Fed Chairman on Friday had to convince the homeowners that a shapp drop in home prices is not yet in view.

"For the nation as a whole, I do not believe that a ’bubble’ has developed, but the extraordinary gains in some local markets may not be sustainable," Greenspan said, answering the queries by Sen. Jim Bunning, at a Feb. 16 Senate Banking Committee hearing.

In Greenspan’s view, "housing market is quite strong at the moment, buoyed by mortgage interest rates that are still low by historical standards and solid growth in real disposable income."

Greenspan predicts a drop in oil prices in 2005, "but only to a level of around $50 per barrel for West Intermediate crude oil."

In two of his public appearances this week, Greenspan offered no clues as to the directions of the US key rate.

The previous moves by the Fed policymakers pushed the bond fund values down, and US long-term bond funds lost 0.8 percent on average in this quarter. Bond prices may be pushed further down as the Fed is largely expected to keep raising rates over the quarter.