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GRADING THE FED'S PERFORMANCE

The Federal Reserve performs the ticklish balancing act of holding the U.S. economy on course--of keeping home ownership growing, keeping wages and salaries increasing, and keeping new businesses merging. Meanwhile, it must avoid spurring inflation and must take into account the many market forces in full view while anticipating untold economic forces (''When Greenspan should've hiked,'' News: Analysis & Commentary, June 1).

Within this complicated environment, it turns out that the Federal Reserve has been doing the right things. The rate increases that economist James C. Cooper would have had the Fed inject would have dampened homebuilding and business growth. Other forces will continue to offset the overshooting of the stock market that Cooper is concerned about.

Someday, the Fed will probably need to lower rates to keep the economy moving. Today's interest rates still are relatively high for the recent low levels of inflation. Asian issues and other world problems may bring greater reason to lower rates, not raise them. Either way, many of us believe the Fed is doing its job very well.

Morley G. Melden
Jamesburg, N.J.


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Updated June 11, 1998 by bwwebmaster
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