WASHINGTON, D.C.: The good times continue to roll, and Americans are proving that they believe it: consumer confidence in the economy has reached its highest level in 28 years. With stock markets surging to record levels, with both unemployment and inflation low, the Conference Board reported that the consumer confidence index rose to 127.1 in May. It was the highest rating since the index stood at 131.7 in August 1969. Because consumer spending accounts for nearly two-thirds of the nation's economic activity, the reports sent the Dow down in early trading on fears that the news meant a too-rapid acceleration in economic activity, which might prompt the Federal Reserve to raise interest rates. But the market quickly recovered to finish up 37.50 at 7,383.41 as investors considered other indicators, such as slowing consumer consumption, that seem to show that economic activity may be slowing enough to keep inflation low without another rate hike. While many investors believe the Fed will move to steer the economy by raising short-term interest rates sometime this year -- a poll of 243 economists by the National Association of Business Economists reported that 84 percent expect an increase -- analysts are split on just how much gross domestic product can safely grow without overheating. TIME's Board of Economists were divided when they met last week with the magazine's editors; Morgan Stanley's Stephen Roach put the figure at 2 to 2.5 percent annually, while Edward Yardeni of Deutsche Morgan Grenfell thinks growth can exceed 4 percent.