WASHINGTON — While economists widely expect Federal Reserve officials to raise interest rates when they meet Tuesday, opinions about what the Fed will do late this year and in early 2005 are growing more varied by the day.

The Fed is expected to raise its target for short-term interest rates Tuesday by a quarter-percentage point to 1.75 percent, less than a percentage point above the 45-year low reached last year.

But in the past few weeks, some economists and investors have scaled back their expectations for future Fed action and now expect that central bankers will take a breather at the end of 2004 and into 2005. Investors in a futures market where they bet on future Fed moves have shaved expectations for Fed actions through the spring by about a quarter-percentage point, according to an analysis by Economy.com.

That's a turnaround from a few months ago, when most economists said the Fed would keep raising rates well into 2005. For consumers and businesses, the change could mean continued low borrowing costs for the foreseeable future.

"If the inflation genie is not in jeopardy of popping out of the bottle and the economy is not coming close to full employment, you can argue that the Fed does not have to push so hard on the tightening pedal," Merrill Lynch's Kathy Bostjancic says.

Bostjancic expects that the Fed will raise rates one more time after Tuesday in 2004, then wait. Nigel Gault of economic consulting firm Global Insight says he's reconsidering his prediction that the Fed will raise rates by 11/2 percentage points in 2005.

"I don't think the economy is strong enough or inflation worrying enough" to warrant much higher rates, he says.

What is changing opinions:Inflation. Following an inflation scare earlier this year, recent inflation readings have suggested price pressures have abated. For the three months ended in August, the consumer price index was up at a seasonally adjusted, annual rate of 1.3 percent, down from 5.5 percent in the three months ended in May.

Jobs. Following sharp gains in the spring, employers have cut back on hiring. Employers added a median 96,000 jobs in the three months ended in August, vs. 324,000 in the three months ended in May.

Consumer. Recent data have suggested consumers are becoming more cautious about spending. Retail sales have fallen three of the past five months.

But some economists warn that inflation is building in the costs of raw materials, which could feed through to consumer prices. Others say interest rates are still too low, given the state of the economy.