FED . . . RECESSION 'ROUND THE BEND?

A Federal Reserve survey released today suggests the economy may be slipping into a mild recession. UnderscoringChairman Alan Greenspan's unusually frank warning of a "modest, near-term recession"Tuesday night, the "Beige Book" survey of business conditions by the Fed's 12 regional banks said key segments of the economy that respond most readily to higher interest rates are slowing dramatically. According to the report,auto industry sales remain "depressed" and home-buying is slower than last year. On the upside, the survey found only mild inflationary pressures. Greenspan's comments have convinced many Fed-watchers that he won't push to cut interest rates when the Fed convenes next month, as many stock and bond investors hope he will. ButTIME's Suneel Ratansays the current economic signals are now so confusing that even Fed members are waiting for the fog to lift. Even if they do not cut rates at the July meeting, Ratan reports, the governors may cut them at any time as more troubling economic news develops.