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There is much speculation that the Federal Reserve Board will raise interest rates again when its Federal Open Market Committee meets on Aug. 16. Let's hope the speculation is wrong. Raising interest rates at this point in the business cycle would be a mistake.

The economy is slowing down, the 2.5 percent inflation rate is the lowest since 1986 and millions of Americans are unemployed or working part time when they'd prefer to be working full time.Yet we have Fed Chairman Alan Greenspan warning the Senate Banking Committee "it is an open question" whether the four interest rate increases this year have been enough to prevent overheating and control inflation.

Greenspan didn't say when or even whether he intended to raise interest rates at the hearing in late July, but his message was clear: We regretfully inform you that we may have to raise rates again.

Earlier this year, Greenspan was criticized by some lawmakers for raising rates as a pre-emptive strike against inflation, even though inflation was nowhere to be seen. Much of the criticism was unjustified if you believe, as Greenspan does, that heading off inflation is more effective than chasing it after it bolts the barn.

But now that interest rates are up more than a percentage point from last winter, it makes little sense to initiate a new round of increases until we see growth figures for the summer quarter.

Housing starts and building permits are down, and sales of existing homes, while still strong, declined 3.6 percent from May to June.

Among forecasters, labor costs, which represent about two-thirds of business expenses, are considered a good barometer of inflationary behavior. Increases in salaries and benefits have been so modest lately that rising productivity has nearly canceled out the cost.

Besides, workers are so jumpy about layoffs that demands for higher pay tend to be less strident than they might have been 30 years ago.

Considering the slack in labor markets, and the determination of profitable as well as unprofitable companies to run lean rather than add new employees, it's hard to see where inflationary pressures could come from. Management, not labor, has the leverage these days.

As a matter of policy, the seven governors of the Federal Reserve Board worry most about inflation. Unlike members of Congress, they are largely insulated from political pressures to provide easy credit to individuals and corporate borrowers.

Presidents of the 12 regional Federal Reserve banks, five of whom serve on the rate-setting Federal Open Market Committee, tend to be even more hawkish on inflation.

Normally, it's wise to err on the side of tight money in disputes over monetary policy. For now, though, Greenspan and his colleagues should leave interest rates alone. Sometimes it's best to do nothing rather than shoot yourself in the foot.