Fed Committee Is Expected to Just Sit Tight : Economy: With indicators on the mend, analysts predict no major changes in direction will come out of today’s policy-making session.

With the economy chugging along and interest rates tumbling, the Federal Reserve’s key policy-making committee is expected to leave monetary policy unchanged at its meeting today.

“There is really no incentive for them to act,” said James Glassman, Fed analyst at Chemical Securities Corp.

Not that the economic outlook is all roses. Three closely watched inflation measures spiked upward in the last month, the housing market remains in the doldrums and job growth has yet to prove it’s in the recovery mode.

But Fed watchers said the central bank’s Federal Open Market Committee, for both practical and political reasons, won’t be in any mood to tamper with the direction of its interest rate policy right now.

The FOMC meets today in Washington to debate economic conditions and whether to tilt monetary policy toward stronger or weaker growth over the next six weeks. Voting is done by the seven Fed governors and five of the 12 Fed district bank presidents, including the head of the New York Fed.

At its December meeting, the last one for which minutes were published, the FOMC voted to hold monetary policy steady.

Since then growth has slowed from its heady 4.8% pace in late 1992 to about 3%. Car and truck sales--an early barometer of consumer behavior--have put on the brakes along with home sales. And the purchasing managers index, a measure of business sentiment, has weakened.

Despite this softening, the Fed is highly unlikely to favor easier money to keep the recovery on track, analysts said.

An easing bias risks spooking the inflation-adverse bond market, driving up interest rates again, just when Fed Chairman Alan Greenspan is banking on cheaper money to keep the economic engines firing, they said.

The yield on the 30-year Treasury bond has pierced the 7.0% barrier for the first time ever to settle around 6.8%. Its dramatic tumble was driven by prospects for tame inflation and lower U.S. budget deficits.

The market has turned a little jittery the last 10 days, however, as it worried over inflation news.

The Commodity Research Bureau’s index of futures prices for raw materials is climbing, wholesale inflation rose 0.4% in February and retail inflation, excluding food and energy costs, has jumped 0.5% for two months in a row.

These figures may well cause inflation hawks such as Gov. Wayne Angell, a devotee of the Commodity Research Bureau’s index, to press for tighter credit to forestall new price pressures.