No, traders, inflation is not under control, say some economists.

Unlike many investors who were buoyed by Tuesday's consumer price figures, a number of economists say they expect the Federal Reserve to raise interest rates not only this month but also in October.

The economists' predictions were based on data released Tuesday -- the government's report of a 0.3% rise in the July consumer price index, a stronger-than-expected 0.7% rise in industrial production, and a 5.7% increase in housing starts. All these data indicate that the economy is not slowing and that it might be picking up steam.

"Next week's rate hike is a done deal," said Carl B. Weinberg, chief economist at High Frequency Economics in Valhalla, N.Y. The Fed will act to "ensure a slowdown of the economy toward a 3% growth rate."

"You have to scratch hard to find signs of even incipient slowing in the economy," said C. Frazier Evans, senior economist at Colonial Management Associates in Boston.

He said he expects the Fed to raise its target for the federal funds rate by a quarter of a percentage point , to 5.25%, at the central bank's monetary policy session next Tuesday and then again by a similar amount at the Oct. 5 session.

The funds rate is charged for overnight loans of excess reserves among commercial banks and, as the shortest-term rate, anchors the yield curve on various maturities of Treasury securities. Treasuries, in turn, are the basis for prices and yields other bonds.

The next Fed rate hike is already assumed by financial market participants, Mr. Evans said. Indeed, investors sent stock prices higher for banks Tuesday on the notion that the Fed will only raise rates by a quarter point next week , rather than the half point considered possible if the inflation report had been worse.

But he said the market is not yet prepared for a third Fed rate move. So this prospect could soon jar investors.

Solid evidence of a slowdown may not arrive "before December data are released in January and first estimates of the fourth quarter are known," Mr. Weinberg said. But for a host of reasons, the Fed cannot wait that long.

It does not want incipient inflation to become entrenched, and it wants to avoid any credit tightening in the final months of 1999, when corporations and individuals are expected to build liquidity to be prepared for possible year-2000 computer problems.

From October on, the economy could face "Y2K retraction from risk - - read this to mean credit crunch," said Mr. Weinberg.

Finally, said Mr. Evans, 2000 is a presidential election year, and the Fed has historically kept a low profile in such years to avoid suggestions of political involvement. "That means, if the Fed believes further rate tightening is necessary, the tendency will be to get it done sooner rather than later," he said.

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