WASHINGTON - Federal Reserve officials will probably agree to keep short-term interest rates unchanged given renewed evidence of a jagged recovery, analysts said yesterday.

Members of the 12-members Federal Open Market Committee met yedterday and are scheduled to continue meeting today to review monetery policy. The meeting sets the stage for Federal Reserve Chairman Alan Greenspan's semiannual economic report to Congress, due to be presented July 20 to a House Banking subcommittee.

Greenspan faces conflicting pressures in presenting his analysis to lawmakers. While he cannot appear indifferent to the fiscal restraint generated by President Clinton's tax package, he must assure financial markets that the Fed will not shrink from the task of keeping inflation under control.

Bond market expectations that the Fed was leaning toward raising the federal funds rate, unchanged at 3% since last September, have been washed away by a slew of weaker-than-expected economic releases.

"The inflation scare has abated somewhat, and recent economic indicators are on the soft side," said Mike Moran, chief economist for Daiwa Securities America.

"I really do believe the Fed will be a lot more sensitive to economic activity rather than inflationary pressures," said David Lereah, chief economist for the Mortgage Bankers Association. "Six months ago, everyone believed the economy was on a steady growth path with inflationary pressures that were gradually building. The Fed got caught up in that, but the whole economic landscape has changed."

Last week, the Commerce Department said its index of leading economic indicators for May slipped 0.3%. Sales of new single-family homes plunged a stunning 21% to 571.000, the lowest level in a year, despite low interest rates.

Also last week, the purchasing managers' index for June slipped below 50%, signaling that the manufacturing sector was contracting once again, and the Conference Board said its consumer confidence index slipped another notch.

All of these reports were over-shadowed by the June employment report, which showed that only 13,000 non-farm payrolls jobs were created while the jobs rate edged back up to 7%. Manufacturing payrolls shrank for the fourth straight month to the lowest level since 1965.

Some analysts expect that Fed policymakers will erase the bias in their policy directive toward higher rates that was reportedly adopted at the last FOMC meeting on May 18, when the bond market was reacting to unsettling reports on producer and consumer prices. Such a move would not undermine the central bank's credibility by making it appear erratic, these analysts say.

"The Fed's just a bunch of economists like everybody else." said Lereah. "They get the same information everyone else does."

Other analysts believe the central bank will maintain a bias in favor of tightening. Douglas Lee, chief economist for County NatWest, USA, said Fed officials still believe a 3% federal funds rate will prove to be soft as the economy picks up a little steam in the second half of the year. If they drop the bias now, they may only have to revive it in a few months, he suggested.

Regardless of the nuances of the policy directive, analysts say there is little reason to believe Fed officials will raise rates in the near future.

"It doesn't make much difference, " said Cynthia Latta, senior financial economist for DRI/McGraw-Hill. "I don't see what's going to pull us out of the doldrums in the second half."

Lee, who is more upbeat about growth prospects and has a forecast calling for an increase in the federal funds rate to 3 1/4% before the year is over, agreed that this month's FOMC meeting will not mean much action for money markets. "It's boring as hell." he said. "It's like watching paint dry."

Federal Reserve Board Governor Susan Phillips said yesterday that Fed officials are paying close attention to the inflation measures. "It's certainly still feasible that we could have further progress on reducing inflation as we continue through this year," she said. "But we're going to have to watch very carefully and monitor some of these price increases to see whether they are sticking."

The economy continues to be hobbled by high government debt levels, loss of exports because of slow foreign growth, and other problems, Phillips said in a speech to college and university business officers here. She suggested that President Clinton's budget, once approved by Congress, could slow growth for a year or more.

On the other hand, Phillips said the economy is being buoyed by a pickup in sales of cars and light trucks and by business purchases of producers' durable equipment. Low interest rates should provide a further lift to housing in coming months, she said.

"I think the economy is still well positioned for a period of sustained non-inflatonary growth," she said.

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