WASHINGTON -- President Bush, acknowledging that the U.S. economy is wobbly, said on Friday that he hopes the latest moves by the Federal Reserve to lower interest rates will help turn things around.

"I'm not prepared to say we're in a recession," said the President, citing the recent Commerce Department estimate that real gross national product expanded at an annualized rate of 2.4% in the third quarter, although he acknowledged that the United States "is not having the kind of growth that I'd like to see."

The President, talking to reporters in Rome where he was attending a meeting of the North Atlantic Treaty Organization, praised last week's moves by the Fed to cut short-term interest rates.

"I cannot help but feel that the interest rates at these rather historic lows will have a stimulative effect on the economy at some point," he said.

At the same time, Mr. Bush said the economy showed both "troubling signs" and "good signs."

"We'll just have to wait and see," he said.

The Federal Home Loan Mortgage Corp. reported last week that the average fixed-range mortgage fell to 8.76%, its lowest since April 1977. Average adjustable-rate mortgages were down to 6.46%.

But there was evidence that administration officials are split on economic and monetary policy. U.S. Treasury Secretary Nicholas Brady, in comments last week on "The Macneil-Lehrer News Hour," said interest rates remain too high. 'I think they can continue to come down," said Mr. Brady, adding that there is "a measure of disagreement" over the issue.

For his part, Mr. Brady seemed to take a rather relaxed view about monetary policy, suggesting that if low interest rates create a problem in financial markets, they can be changed by the Fed. "This isn't something immutable."

President Bush was more cautious, noting that the bond market has already been agitated by talk in Washington of broad tax cuts that could end up adding to the budget deficit and inflation.

"The one thing that would make it worse" would be to drive interest rates "sky high," he said. "That would make it certain we don't have a recovery."

Mr. Bush said he did not look favorably on the tax cut plan offered last week by House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill. Mr. Rostenkowski plans to have hearings on his bill in December but has said he will not seek enactment until next year.

Following Mr. Bush's comments on interest rates and the economy, the Federal Reserve in the late afternoon release minutes of the Oct. 1 meeting of the Federal Open Market Committee.

The record showed that FOMC members voted 10-to-0 to maintain a neutral monetary policy with a bias in favor of lower rates.

Members said uneven economic conditions in different parts of the country made it especially difficult to assess the overall economy. But they agreed that on balance a "sluggish recovery" was still under way with favorable prospects "for a sustained recovery" in the next several quarters.

However, many FOMC members said the risks to the expansion appeared to be titled "to the downside" and several members said they were worried about ongoing weakness in money and credit.

In discussing the outlook for key sectors of the economy, the Fed officials said that despite reports of weak retail sales, consumer spending was still rising.

As a result, the minutes say, consumers were "likely to provide important support to the overall economic expansion."

However, Fed officials also said that help from the consumer sector might be limited, given cautious consumer attitudes toward spending and worries about job prospects and personal debt burdens.

The Fed policymakers also said they anticipated that a turnaround from cuts in business inventories to some form of inventory buildup "would stimulate the economy in the quarters ahead."

Fred officials also said they expected to see additional economic stimulus in residential construction, although they acknowledged that the housing sector "appeared to have lost some momentum during the summer months."

Declines in mortgage interest rates and growth in the overall economy as well as people's incomes "pointed to a gradual uptrend in housing construction," the minutes say.

FOMC members have mixed views on the credit crunch and financial conditions. They note that balance sheets at many banks were improving but that businesses and households continued to be troubled by heavy debt loads.

Moreover, officials said, "it was difficult to assess the extent to which the weakness in loan" activity reflected the credit crunch, as opposed to lack of demand from borrowers.

Since the October meeting of the FOMC, Fed officials have slashed short-term interest rates on evidence of a weak economy and slow money growth and credit. The discount rate has been brought down to 4.5%.

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