Nearly everyone will be surprised if the Federal Reserve raises interest rates next week, but a few are still bracing themselves.

A new American Banker yield and rate survey of 50 economists found just three who believe a good chance remains that the central bank will tighten credit a notch at its Aug. 20 monetary policy session.

It is a remarkable shift in sentiment from early July, when the last such meeting occurred. At that time, many in the financial community were nonplussed as the Fed left rates unchanged; they then assumed a rate increase by late summer was not in doubt.

Over the past two weeks, however, fresh data have hinted that the economy's strong second-quarter growth pace might be cooling. The latest arrived Friday, when the producer price index for July, a key barometer of business conditions and future inflation, was unchanged from the previous month.

A Fed rate hike, most of Wall Street has now decided, is unlikely until after the Nov. 5 presidential election, at the earliest.

Not so fast, says Nicholas S. Perna, chief economist at Fleet Financial Group Inc., who said last week that he still sees "a better than even chance" of a quarter-point rise in rates.

"The latest readings on the economy may be a little more benign, but they are still on the strong side," he said.

The bond market rallied when the July employment report showed a payroll gain of 190,000, or about 10,000 fewer than Wall Street had expected. That snapped a string of stronger-than-expected reports that had unnerved investors since spring.

But Mr. Perna said the Fed likely wanted to see "at most 150,000 payroll jobs created." The higher rate indicates the economy is growing faster than the roughly 2% annual rate the central bank probably wants in order to avert inflationary pressure.

"Based on Eurodollar futures and other signs," he said, "the markets seem to expect the Fed to tighten by 75 basis points, starting after the election.

"I think they've got the timing wrong. Waiting until after the election could allow enough of the inflation genie out of the bottle to give the Fed a bigger problem," he said.

But the Fleet economist said the members of the Federal Open Market Committee "face a very difficult decision. It will be a tough call after a real debate. I imagine that none of them know right now what they may do."

The recent signs of weakening business conditions also do not impress Gary L. Ciminero, an economist in Providence, R.I. "I look for a slower economy and higher inflation in the second half," he said.

"Inflation often shows up late in the economic cycle. That's when the Fed's job gets rather poignant, but I'm sure they want to get ahead of the curve," said Mr. Ciminero, whose firm is called Independent Economic Advisory.

A third economist expecting a rise, Donald Ratajczak of Georgia State University, could not be reached for comment.

Mr. Ciminero, who was formerly at Fleet, expects a quarter-point increase in the federal funds rate. He sees inflationary problems in labor and housing costs.

The recent rise in labor costs, he said, has been "mild but relentless," while "housing prices gave us a bonus in subtracting from inflation for several years but now have turned the other direction."

Mr. Ciminero said several inflation warnings may surface before the Fed meets, including data from the consumer price index.

If that economic indicator shows significant price pressure, feelings about what the Fed may do next week could shift again.

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