The Fed's war on inflation

ALL Americans have a vested interest in ensuring that the hard-won gains made in holding down the rate of inflation are protected. In that regard, reports out of Washington over the weekend on February's inflation rate - an increase of 0.4 percent from January, down slightly from 0.6 percent the month before - are encouraging. Wall Street has been jittery about rising interest rates in general and concerns that the United States economy is growing too fast.

The rapid jump in economic growth registered during the first quarter of 1984 - 7.2 percent, according to the government's ''flash'' estimate - has already led to concerns that conditions could lead to more inflation later this year, thus prompting the Federal Reserve Board to take steps to slow the economy.

For the moment, as this weekend's figures indicate, the fight against inflation can be said to be going fairly well. That is not to say that an inflation rate of 6.1 percent - the annual rate when the first two months are taken together - is acceptable. It is not. But when compared with the double digit rates of the late 1970s and early '80s, inflation is running at a relatively low rate.

In 1983, it should be recalled, inflation reached a 10-year low of 3.8 percent, the result of the recession. Most economists expect inflation to be in the range of 4 to 6 percent for 1984, though a few analysts see it jumping higher. And monetarist economists argue that the recent surge in the rate of increase in the money supply will put a long-range upward pressure on prices. That issue will be taken up by the Federal Reserve Board when its Federal Open Market Committee meets in Washington today and tomorrow to consider whether to tighten credit.

Many factors continue to work in favor of only a modest rise in inflation: Still strong productivity gains (although there has been a slowdown in the past few weeks); the high value of the dollar in world money markets, which makes relatively lower-priced imports attractive and helps to restrain prices of US-made goods; and, so far this year, modest wage increases.

A number of key wage contracts come up for negotiation later this year. Unions need to recognize that seeking wage increases that are higher than actual gains in productivity are ultimately self-defeating, in terms of contributing to inflation. Employers at the same time have a clear responsibility to ensure that employees are paid a salary that keeps pace with inflation, yet enables workers to feel a sense of gain and commitment toward their company and industry.