Lenders can reasonably expect the Fed to raise interest rates a further quarter to half of a percentage point this year, a Fed economist told mortgage bankers last week.

But the rise should barely dent the nation's economic vigor, emphasized Jack H. Beebe, senior vice president and director of economic research at the Federal Reserve Bank of San Francisco.

To no one's surprise, Mr. Beebe didn't come right out and say there would be another rate hike. Instead, he said: "The market's not expecting an increase in the next six or seven months. I find that puzzling."

A modest rise in rates-a quarter or a half of a percentage point-would not be unreasonable to expect, he said.

And even if rates do move up this year, "we'll still have an economy that stays at eye level," Mr. Beebe assured participants at the Mortgage Bankers Association's secondary marketing conference in San Francisco.

After offering the usual disclaimer that he was not speaking on behalf of the central bank, Mr. Beebe went on to say he shared Fed Chairman Alan Greenspan's concern about a too-highly-charged economy.

On March 25 the Fed's Open Market Committee shifted away from a neutral monetary policy and raised its target rate for federal funds by one-quarter point, to 5.5%.

The move, the first tightening of short-term rates in more than two years, prompted speculation about whether-and how often-the Fed might act again this year.

Mr. Beebe suggested the Fed isn't likely to ratchet up rates with the force it used in 1994-95, when short-term rates were doubled from the low levels set to fight the recession of the early '90s. Instead the central bank will now be aiming to "pull up inflation risks a bit," he said.

To be sure, signs have emerged in recent months that the nation's rapid economic growth is slowing, Mr. Beebe said. Exuberance broke out again last week on Wall Street as lower than expected employment gains were posted for April and political leaders reached an accord to balance the federal budget and cut the capital gains tax.

But there are also troubling signs of possible excesses in the economy, Mr. Beebe pointed out. Consumer spending has been increasing at "binge" rates, and consumer savings rates are not really moving.

Meanwhile, health-care and labor costs are poised to rise in the next couple of years, he said.

On the mortgage front, Mr. Beebe said he expects housing starts to slow this year but thinks the homebuying market will stay solid. That assessment jibed with the sentiments of mortgage industry leaders who attended the MBA conference.

"The nation's economic outlook for 1997 looks solid," said Freddie Mac chairman Leland Brendsel. "All in all, the outlook for the mortgage industry is quite good."

Indeed, while originations are not moving at last year's record pace, they should still top $700 billion, Mr. Brendsel said.

He expects fixed-rate mortgages to stay at around 8% this year.

The environment Mr. Beebe described "is still constructive for housing," said Mark Smith, president of Crestar Mortgage Corp. and president-elect of the MBA.

"We've had six years of net growth in home sales," Mr. Smith said. "I don't think all the steam is out of that part of the equation."

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