WASHINGTON -- While the Federal Reserve is clearly determined to raise short-term interest rates further, comments by the central bank's top two officials suggest that it may not act at the next meeting of its policy-making committee on Dec. 20, preferring to wait until January or early February.
The delay seems likely because top Fed officials made clear last week that they wanted to weigh information on the economy's health that will not be available until January. Fed officials also expressed little concern that tax cuts might widen the budget deficit and feed inflation next year.
"The truth is that we have to be into January, beyond the end of the quarter, before we have a substantial majority of the data," said Alan S. Blinder, the Fed's vice chairman, at a news conference Friday organized by the Chicago Board of Trade.
The Fed, which has already raised short-term interest rates six times this year, believes it must brake the economy's growth to head off inflationary shortages of goods and skilled labor.
Several sets of government statistics to be made public in the next several days may still persuade Fed officials to act before January. The Labor Department is scheduled to issue November figures for producer price inflation tomorrow, and for consumer price inflation Wednesday.
Also Wednesday, the Federal Reserve plans to issue its estimates of how close American heavy industry was to operating at full capacity during November.
An unexpectedly large inflation gain -- or signs that American factories are straining to produce enough goods -- could so alarm the bond market that the Fed may be compelled to raise rates to reassure investors that it remains intent on fighting inflation.
As administration officials have been wont to do, Treasury Secretary Lloyd Bentsen declined yesterday to predict what the Fed will do. But in an interview on "This Week With David Brinkley" on ABC, he said the Fed faced a difficult decision.
"I believe the next call for them will be the toughest one yet," he said, because the central bankers will not be able to precisely judge the braking effects of previous rate increases.
Several comments last week by Fed Chairman Alan Greenspan and Blinder indicate that the central bank is reluctant to play the role that Sen. Paul S. Sarbanes, D-Md., described last week: the grinch that stole Christmas.
Rather than raise rates immediately, the senior officials could decide on Dec. 20 to give Mr. Greenspan the explicit discretion to raise interest rates in January if government statistics then show a risk of inflation.
If Mr. Greenspan does not use this authority, then Fed officials would likely raise interest rates sharply when the policy-making panel, the Federal Open Market Committee, meets next, on Jan. and Feb. 1.
"They have seen nothing so far that dissuades them from their concern that higher inflation is around the corner," said Michael J. Boskin, the chairman of the Council of Economic Advisers during the Bush administration.