"UPDATE 2-Fed`s Parry-Too early to judge inflation trend April 14, 2004 20:09:41 (ET) (Recasts throughout, adds quotes from question-and-answer session, changes dateline, previous NEW YORK) MORAGA, Calif., April 14 (Reuters) - The Federal Reserve will have to raise its benchmark federal funds rate "at some point" to head off inflation, but rising prices are not a concern yet, outgoing San Francisco Federal Reserve President Robert Parry said on Wednesday. "With the federal funds rate at only 1 percent, short-term rates will need to move up at some point to prevent a rise in inflation," Parry told an economics conference at St. Mary's College in Moraga, California. But he played down recent robust economic data including a 0.5 percent jump in March consumer prices, saying the economy still had spare capacity that it will take time to use up. "We'll probably need to see relatively strong growth for a few more quarters before we work off that slack," he said. Parry said it is too early to say there is a trend of higher U.S. inflation, even after the rise in consumer prices, and he expects inflation will remain "relatively well behaved" in months ahead. "I frankly think it's too early to say what signal is coming from those numbers," Parry told reporters when asked about the CPI report released earlier on Wednesday. " Add this with that- the good Q1 reports and the bouce off the 50- and you get a bull run. What other prediction for tomorrow's action could we logically arrive at?