WASHINGTON -- Bond market analysts are split in assessing how close Federal Reserve officials are to raising short-term rates.

Some say Fed Chairman Alan Greenspan's testimony on Tuesday before a House Banking subcommittee contained a blunt warning to Congress that Fed officials are preparing to tighten monetary policy later this year.

"When he talks about interest rates being too low, definitely the next move is for a tightening," said Brian Wesbury, chief economist for Griffin, Kubik, Stephens & Thompson Inc., a Chicago brokerage.

Others say that assessment reads too much into Greenspan's testimony. They say the Fed remains generally neutral on rates, although officials remain clearly on the alert for new signs of price pressures.

"His testimony was dull as dirt," said Neal Soss, chief economist for Fist Boston Corp. "Greenspan was not saying that the intends to drive interest rates up, down, or sideways. The more carefully I read his testimony, the less I find in it."

Treasury Secretary Lloyd Bentsen told reporters yesterday that he is "not concerned" about the possibility of a Fed tightening from his reading of Greenspan's testimony.

Fed watching is often a subtle and error-prone preoccupation for highly paid analysts at investment banking and securities firms, and Greenspan typically seeks to avoid tipping his hand to the bond market in congressional testimony.

The situation is more complicated usual because the economic and inflation data have been so mixed. While the May and June price reports signaled hardly any inflation, they followed unsettling reports earlier in the year that led the Federal Open Market Committee to adopt a policy directive leaning toward a tighter monetary policy.

The economy continues to labor over problems such as tight credit conditions for small businesses and defense cutbacks, although Greenspan said growth probably accelerated to at least 2.5% in the second quarter after rising a meager 0.7% in the first quarter.

"The situation is unusually obscure," said Stephen Axilrod, vice chairman of Nikko Securities Co. International.

Politically, Greenspan had to face congressional members preoccupied with the negotiations among House and Senate conferees over President Clinton's deficit reduction plan. He had to be aware that any overt threat to raise rates might reinforce appeals by some lawmakers to scale back Clinton's $500 billion plan, a move Greenspan cautioned would drive up long-term interest rates.

Some analysts concluded that Greenspan was unusually candid in his comments. He stressed that Fed officials remain worried about inflation which he called "disappointing" so far this year.

Greenspan also went on at great length about how Fed policymakers have dropped their reliance on money supply measures as a forecasting gauge while paying extra attention to real interest rates, or rates adjusted for inflation. Real short-term rates such as the current federal funds of 3% are "not far from zero," he said.

Because inflation is still running slightly over 3%, or close to 31/2% excluding goods and energy, some analysts believe Greenspan was implicitly arguing that a soft federal funds rate will soon have to be nudged up in coming months. "He's definitely laying the case for tightening," said Dana Johnson, head of market analysis for First National Bank of Chicago.

Johnson said Greenspan's "hawkish comments on inflation" and arguments that short-term rates are "unsustainably low" signal that policymakers will raise the federal funds rate to 3 1/4% and possibly again to 3 1/2% by the end of the year." He's sensitized the market to the possibility of bearish news that we may get in the months ahead, said Johnson.

"The underlying message of these remarks is that a less accommodative policy is needed now," said Charles Lieberman, managing director for Chemical Securities Inc. "Since growth is not strong and inflation pressures are not clearly evident, a tightening of policy would probably inflict much less damage on long-term interest rates. But bond prices will not escape unscathed."

Lieberman told clients in a market letter to look for a 3 1/2% federal funds rate by the end of the year, with yields on the 30-year Treasury bond rising slightly to a range of 6 3/4% to 7%.

Other analysts remain to be convinced there will be much action on rates. Paul Kasriel, vice president for Northern Trust Co. in Chicago, said. "It's not clear that we have a lot of inflationary pressures building up at the current time, and that's what the Fed will act on."

Kasriel said that while gold prices have risen, prices of oil and industrial commodities have dropped recently. He said he believes Fed officials will wait until inflation gets above 3 1/2% before tightening policy.

Soss of First Boston said he believes reporters at some major newspapers misread Greenspan's testimony because they were influenced by the negative reaction in the bond market.

And, he suggested, much of Greenspan's testimony was prepared with a view toward defending the May policy directive of the FOMC that tilted policy toward higher rates. "You have to read that testimony against the background of a chairman who was afraid he would be asked why the economy is sucking wind."

Soss said Clinton's tax increases, if enacted, will start to hit businesses and high-income individuals as early as Oct. 1 and act as a drag on growth by curtailing yearend spending. The situation might actually lead the Fed to trim short-term rates rather than raise them, he said.

However, other analysts said Fed officials are expecting the economy to show more vigor in coming months. Axilrod said that even though officials trimmed their growth forecast this year to around 2 1/2%, that translates into comparatively healthier growth of 3% or more in the second half.

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