Business Highlights

WASHINGTON — Federal Reserve policy-makers must monitor various economic vital signs when diagnosing where interest rates need to go to keep the economy healthy, Federal Reserve Chairman Ben Bernanke said Monday.

The performance of bonds — which can contain important clues about the economy’s prospects — certainly should be looked at closely, but not in isolation, he said.

"Policy-makers should monitor bond yields carefully in judging the current state of the economy — but only in tandem with the signals from other important financial variables; direct readings on spending, production and prices and a goodly helping of qualitative information,” the Fed chief said in a speech to the Economic Club of New York.

A copy the speech was distributed in Washington.

"Ultimately, a robust approach to policymaking requires the use of multiple sources of information ... combined with frequent reality checks,” he said.

Bernanke did not specifically discuss the Fed’s next interest rate move.

Ex-Qwest accountant accuses SEC of suing him for evidence

DENVER — A former Qwest accountant accused federal regulators Monday of filing fraud charges against him because he did not "spill the beans” to their satisfaction against ex-Chief Executive Officer Joseph Nacchio and other former executives.

James Kozlowski’s attorney also contended in brief filed in U.S. District Court that Securities and Exchange Commission representatives wanted to make a statement about fraudulent accounting when they filed the lawsuit.

"The ulterior purpose is evident here ... i) give us the goods on Nacchio et al or we will sue you for fraud; and ii) we need to sue Mr. Kozlowski because we need to send a message to the accounting community,” attorney Kevin Evans wrote.

SEC Attorney Robert Fusfeld declined comment.

The SEC has said Kozlowski, Nacchio and five other former executives orchestrated a financial fraud that concealed the source of billions of dollars in revenue Qwest Communications International Inc. later was forced to restate. One defendant has settled while the case is proceeding against the others.

Evans wrote that during 2004, SEC staff members told Kozlowski they would not recommend fraud charges against him if he offered evidence against Nacchio and other executives. However, Kozlowski said he had told SEC officials what he knew during five days of testimony the previous year.<