Predictions See Fed On Hold For June

Don't discount the possibility that a surprise or two during the next two weeks could alter the U.S. economic landscape. The consumer price index due out June 15 and industrial production on June 16 are candidates. But, in a dramatic reversal of earlier expectations, consensus is growing that Alan Greenspan and his Federal Reserve colleagues will not raise short-term interest rates at their June 27-28 meeting. The U. S. growth rate is moderating and "there are no signs of inflation," judges New York-based Bruce Steinberg, Merrill Lynch & Co.'s chief economist. However, Brian J. Fabbri, chief economist-North America at Paribas Corp., New York, a unit of Paris-based BNP Paribas, believes the tightness in labor markets means inflation is still a threat. His prediction: the Federal Open Market Committee will take a pass in June but then probably boost the federal funds rate again in August.