The nation's inflation rate, so tame as to be nearly forgotten, could lurch upward in the next several months, but a long-term deflationary trend is expected to continue.

"As soon as next month, we are likely to see the first 2% headline inflation rate for 15 months," said Ian Shepherdson, chief U.S. economist at High Frequency Economics, Valhalla, N.Y.

Inflation is expressed as an annual rate-last year it was 1.6%.

Mr. Shepherdson said he thinks some of the rise will be purely statistical. Notably, energy prices fell during last year's mild winter. This means that even if energy prices this year are flat, the comparison will appear inflationary.

The December inflation report was distorted by tobacco price hikes, but economists at Credit Suisse First Boston warned: "We think December will mark the start of an upward creep in the year-over-year figures."

Economists Sung Won Sohn and Don Hilber of Wells Fargo & Co. said: "Food and energy prices will not dip lower; once these components of inflation stop decreasing, the overall CPI will receive upward pressure. This year, the inflation rate could edge up to 2.0% to 2.5%."

"Remember, the consumer price index would have risen just over 3% in 1998 had oil prices not fallen," said economist L. Douglas Lee of HSBC Securities. "Given that the bond market is discounting an inflation rate of 1% or less, any negative surprise is likely to be very unwelcome."

Mr. Shepherdson said he thinks the inflation rate by April "could easily be over 2.5%." That would not only keep the Federal Reserve from reducing interest rates but also kindle market concerns about a rate hike if the economy does not slow down.

Nevertheless, other economists think disinflationary and even deflationary forces will continue to hold the upper hand.

At Chase Securities Inc., a unit of Chase Manhattan Corp., chief economist John Lipsky and senior U.S. economist James Glassman are sticking to their forecast of sustained lower inflation. They expect a CPI rise of only about 1% this year, which should open the way for lower rates as the economy slows.

"Growth is expected to slow substantially, while inflation retreats," they forecast. "Long-term interest rates will fall, and the Fed will resume easing-mostly likely before the middle of the year.

"Additional Brazilian turmoil would add to the downside risk to growth, further reducing inflation pressures and clouding the outlook for corporate profits," they said last week.

A 1% CPI this year is also forecast by Edward Yardeni, chief economist at Deutsche Bank Securities, New York. Falling commodity prices are the biggest tipoff, he said.

But Mr. Yardeni and some others argued that deflation casts the biggest shadow on the economic horizon. The primary reason is history, he said.

"Wars are inflationary, while peace tends to be deflationary," Mr. Yardeni said. "If this simple historical observation is correct, then the end of the modern day 50-Year War-World War II and the Cold War combined- should be extremely deflationary."

Central banks have offset deflationary forces by cutting interest rates, but that effort may soon be exhausted, he contended. "As we are about to enter the new millennium, I expect that the forces of deflation will actually strengthen and prevail over easy money."

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