Federal Reserve policymakers will refuse to be lured into raising rates by forecasts of up to a seven-per cent annual economic growth rate in the third quarter, the speediest since the last quarter of 1999, they said.

Instead, fears of deflation and the risk that the economy will run out of stamina will force Federal Reserve Chairman Alan Greenspan and his colleagues to hold fast, economists said.

Members of the Federal Open Market Committee meet Tuesday to ponder the key federal funds target rate, now at a 1958 low of 1.00 per cent, and a decision is set to be released at 2:15 pm (1615 GMT).

Gross domestic product data for the third quarter is set to be released on Thursday.

"We had a very strong third quarter, GDP growth will probably be six per cent, perhaps higher than that," Lehman Brothers chief US economist Ethan Harris said.

"But from the Fed perspective, the clock has just started ticking on this recovery and after two and a half years of very poor economic performance the Fed is not going to react to one quarter of better data."

Federal Reserve members wanted to see several quarters of solid growth and a significant improvement in the labour market before considering an increase in interest rates, he said.

US businesses unexpectedly hired 57,000 extra people in September, finally snapping a seven-month run of layoffs, but the jobless rate stagnated at 6.1 per cent.

"We know the third quarter had a lot of good things going for it, we had the tax cuts, cash coming out of mortgage refinancing activity, the end of the war in Iraq," Harris said.

"I don't think the Fed will celebrate the third quarter in a big way," he added. "They want to see a major healing process in the economy before they start making any change."

The Fed was unlikely to raise interest rates any time in the next year, he said, noting that a decade ago it had been equally reluctant to raise interest rates after a "jobless recovery."

BMO Financial Group economist Sal Guatieri said the menace of deflation would keep the policymakers on guard, despite his expectation of a searing seven-per cent growth rate in the third quarter.

the Fed would likely issue a press release saying the economy appeared to be in the midst of a strong, sustainable recovery but that the expansion was not enough to remove the minor risk of deflation, he said.

He expected interest rates to be stuck until spring next year.