Interest-rate hike unlikely - for now

Economic growth at home and a nascent recovery abroad have the Federal Reserve focused once again on its old nemesis: domestic inflation.

Amid patchy evidence of rising prices, Fed policymakers meet tomorrow to decide whether to take the inflation-fighting step of raising interest rates. So far, Fed officials have not signaled their intentions.

But that silence in itself is a signal that the central bank will probably leave borrowing costs unchanged: The Fed usually telegraphs its intentions well ahead of time to avoid out-sized reactions in financial markets. The Fed has twice nudged up rates this year to keep inflation at bay.

A Friday poll of the top 30 trading firms shows only one expects the Fed to raise rates this week.

Those results came despite evidence, released Friday, that the nation's manufacturers added power in September, as orders and production climbed, while robust consumer spending in August pointed to a quickening economic pace.

(c) Copyright 1999. The Christian Science Publishing Society