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ANOTHER CUT IN RATES IS EXPECTED IN MARCH

SHARE ANOTHER CUT IN RATES IS EXPECTED IN MARCH

The economists who have most accurately forecast the Federal Reserve's actions in the past year-and-a-half believe the Fed will likely push interest rates lower again in late March.

Since November 1994, Merrill Lynch Government Securities has racked up the best record for forecasting policy shortly before the Fed's policy-setting meetings, based on a survey by Dow Jones Capital Markets Report. Yamaichi International (America) Inc. chief economist Michael Strauss nearly matched Merrill's record and thus ranked a close second.Merrill has forecast policy correctly for the past 11 meetings, with one minor exception. In November 1994, it predicted the Fed would push interest rates one-half-point lower. The Fed tightened by three-quarters of a point.

Now, Merrill sees another rate reduction in March.

Merrill economists term the economy "unambiguously weak." In a recent analysis, they wrote, "The credit market is forecasting both more easing and a pickup in growth. We agree with that outlook but believe that the pickup in economic activity will be fairly muted and that the U.S. economy will remain fairly weak for months before it shows believable signs of a pickup."

Yamaichi's Strauss expects to see the Fed cut rates another quarter point after its policymaking committee meets in March.

While Strauss sees a weak first quarter for the U.S. economy, he says growth will clearly rebound in the second on "pent-up demand." His forecast is for 1 percent to 1.5 percent growth in the first quarter, followed by 2.5 percent to 3 percent in the second.