Rate Cut Prompts More Guessing About Future

WASHINGTON — As Federal Reserve Board Chairman Alan Greenspan prepares for this week’s semiannual accounting to Congress, he increasingly resembles a skilled pilot who has brought an unstable craft through to a soft landing.

Greenspan, supported by an expanding economy that appears to have shaken off fears of recession and by a seemingly contained inflation, comes to the session in an enviable position, analysts say.

“One of the jobs of the Fed chairman is to worry, but he will have a very hard time finding anything to feel very anxious about,” said economist David Jones of Aubrey G. Lanston and Co.

Nor will the Congress, which has in the past been quite willing to attack the Fed chairman for being focused on inflation to the detriment of employment and for moving too slowly when economic weakness appeared.

Greenspan has even given the economy and the all-important consumer a bit of assurance, cutting interest rates earlier this month to help make certain the slowing expansion did not come to a halt.

Although it is not certain that that has been achieved, recent economic indicators add to the growing perception that the slowdown is past and that the economy is re-accelerating again. The “soft landing” scenario seems back on its path.

For these reasons, analysts believe Greenspan will make clear to the House Banking Committee that the quarter-point cut in the federal funds rate was not necessarily the first step in a series of rate cuts.

Some analysts, however, think the Fed might take another nick in rates to make sure the economy continues to expand at a sustainable pace but without inflation. It is unusual for the Fed to make just one turn on interest rates.