If there's any doubt that the Federal Reserve will raise rates at a "measured" pace this year, Fed Chief Alan Greenspan is likely to quash it when he delivers his semiannual testimony to Congress on Tuesday. After a batch of weaker-than-expected economic data and recent commentary from various Fed officials, somewhat dovish comments shouldn't come as a surprise to the markets, but they probably will. Many bond investors are still worried about aggressive rate hikes this year and are calling for bond prices to retreat over the near term. The number of short positions (bets that bond prices will decline) established in the 10-year note future hit a record 216,000 contracts in the week ended last Tuesday, up from 192,000 during the prior week. In his speech before the U.S. Senate, Greenspan is likely to justify the recent hike in interest rates by saying that the economy has strengthened and that the risks of deflation have diminished. But he also could acknowledge the recent moderation in the economy and reiterate that rate hikes should be gradually going forward. Last month, retail sales, employment growth and manufacturing activity all came in well below economists' estimates. And while regional manufacturing surveys in early July have been encouraging, the four-week moving average of jobless claims has increased and consumer sentiment has risen less than expected. There are other reasons for Greenspan to remain cautious. Wages are still lagging behind prices and real average weekly earnings are down 1.4% from last year, the softest pace since 1995. Although the job market has improved since August, those age 60 and over have snapped up about one-third of the jobs, according to Merrill Lynch. Meanwhile, the labor force participation rate for those people in their prime earnings years (those age 25 to 54) is the lowest in 17 years.