WASHINGTON -- The Federal Reserve should raise short-term interest rates immediately because current policy is pumping too much liquidity into the economy and is causing a speculative bubble in the bond and stock markets, a panel of private economists said yesterday.

"The committee warned that easy money was playing a major role in driving up stock and bond prices, particularly the latter, thus raising the risk of a ~bubble' in security prices that eventually will burst," the Shadow Open Market Committee said in a prepared statement.

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