The criticism began last month, as soon as Federal Reserve Chairman Alan Greenspan began to signal that the central bank was considering raising interest rates at its policymaking session today to make sure inflation stays low.

The critics' arguments have been part economics and part social policy.

"After two decades of slipping behind, those at the lower end of the economic ladder are finally finding jobs, getting promotions, receiving training and enjoying real wage increases," Sen. Paul S. Sarbanes (D-Md.) told Greenspan at a congressional hearing.

Higher interest rates, which would hurt such people by slowing economic growth, simply aren't needed because current economic conditions "are consistent with containing inflation, and there is no justification for an interest rate increase at this time," Sarbanes argued. "I very much hope that the Federal Open Market Committee [the policymaking group meeting today] won't sort of adopt a so-called preemptive strategy without finding any basis or foundation in any of the economic trends . . . to move interest rates up."

Of course, this is exactly what Greenspan has suggested the Fed is about to do: raise short-term interest rates even though there is no evidence that inflation is about to get worse.

"Is there, at the moment, any evidence of accelerating inflation?" Greenspan asked rhetorically in recent congressional testimony. "In my view, I think you'd be hard pressed to find it."

But as he said repeatedly in recent weeks, because of the lags between changes in interest rates and their effects on the economy, the Fed sometimes has to act preemptively -- that is, in advance of any concrete sign that action is needed. Greenspan's key concern now is that growth has been so strong for so long that the pool of people who are jobless but available to work has shrunk to historic lows. If it continues to shrink, sooner or later employers will begin to boost wages in an inflationary fashion, Greenspan maintained.

Rep. Barney Frank (D-Mass.), a liberal who has frequently crossed swords with the Fed chairman, said in an interview that such a preemptive strike would be "very counterproductive" and completely unnecessary.

"It's only over the last couple of years that we have begun to see poor people begin to benefit from this expansion," Frank said. "To cut the expansion off just as it is starting to reach them is wrong. It's a terrible mistake to ignore equity for its own sake and the economy generally. If we were talking about real inflation, that would be different."

The view is much the same at the Washington headquarters of the National Association of Manufacturers, where President Jerry Jasinowski, an economist, said earlier this month, "Since inflationary pressures in the economy remain dormant, interest rates should not be raised."

"Foreign competition, lower [materials] prices and continued strong productivity, which has lowered the wage inflation that characteristically forces up prices, all have held down prices," Jasinowski said. "Since these trends are likely to continue, the Federal Reserve would be wise to take a `wait-and-see' position."

Last week, AFL-CIO President John J. Sweeney took the same view.

At a Capitol Hill press conference organized by Frank, Sweeney noted that five years ago, when unemployment first dropped below 6 percent, "inflation hawks warned . . . that such low unemployment would soon trigger inflation. Yet inflation came down." And as the jobless rate kept falling through 5.5 percent, 5 percent and finally 4.5 percent, "each time we were warned that faster inflation was just around the corner." The unemployment rate was 4.2 percent in May.

"The benefits of allowing the expansion to run its course have been enormous," Sweeney continued.

Frank acknowledged yesterday that the Fed policymakers, who began their two-day session yesterday, are likely to raise short-term rates by a quarter-percentage point today.

"We did not think we would have a very significant effect on the current decision," Frank said, "but will it be two or three or six rate increases? I hope we have affected that."

CAPTION: Alan Greenspan acknowledges that the Fed intends to raise short-term interest rates even though there is no sign inflation will worsen.