FEELING OUT FINANCIAL FUTURE; FED'S CONCERN TURNING TO GLOBAL WOES.

Byline: David E. Sanger and Richard W. Stevenson The New York Times

Alan Greenspan, the Federal Reserve chairman, signaled Friday that the central bank is now less concerned about inflation as a threat to the U.S. economy but is increasingly wary that the spreading global financial crisis could harm the United States.

Greenspan's comments at the University of California at Berkeley came just minutes before Treasury Secretary Robert Rubin met in San Francisco with Japan's new finance minister, Kiichi Miyazawa, to hammer home the message that the best hope of halting the international crisis lies in quick action by Tokyo to stimulate its economy and shore up its financial system.

But with market volatility having spread to Latin America and with Russia veering toward economic collapse, U.S. officials said they feared that it would be increasingly difficult to contain the turmoil.

At the end of a week in which Wall Street experienced a sharp sell-off, Greenspan said that even the United States was increasingly vulnerable. ``It is just not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress,'' he said.

Greenspan stopped short of suggesting that the Federal Reserve will cut interest rates, a step being urged on him by a growing chorus of economists and officials in other countries. An interest-rate reduction in the United States would help lower borrowing costs around the world and could be a powerful psychological boost to embattled investors at home and abroad.

But Greenspan's comments were a marked departure from his last major policy statement, in July, when he told Congress that the risks of inflation outweighed the possibility that the global financial turmoil could push the otherwise strong U.S. economy into recession. And in explaining the change in his speech Friday, Greenspan seemed to open the door to consideration of an interest rate cut if the global financial situation continues to deteriorate or if the U.S. economy shows signs of stalling.

The global turmoil that has robbed countries of prosperity and growth has benefited the United States so far by helping to dampen inflation and slow down an economy that was at risk of overheating, Greenspan said in his speech Friday night. The downward pressure on inflation is likely to intensify as the turmoil in other nations mounts, a development that he said led Federal Reserve policy-makers to rethink their strategy at their last meeting Aug. 18.

``In the spring and early summer, the Federal Open Market Committee was concerned that a rise in inflation was the primary threat to the continued expansion of the economy,'' Greenspan said. ``By the time of the committee's August meeting, the risks had become balanced and the committee will need to consider carefully the potential ramifications of ongoing developments since that meeting.''

Greenspan, who always leaves himself an out when he makes public pronouncements, went on to indicate that the central bank will not rush into a decision about reducing rates just because of the sharp fall in stock prices this week.

``We have relearned in recent weeks that just as a bull stock market feels unending and secure as an economy and stock market move forward, so it can feel when markets contract that recovery is inconceivable,'' he said. ``Both, of course, are wrong. But because of the difficulty imagining a turnabout when such emotions take hold, periods of euphoria or distress tend to feed on themselves.''

Greenspan was to join Rubin after his speech in meeting with Miyazawa.

Earlier this week in Moscow, President Clinton termed Friday's meeting with Miyazawa, who served as Japan's prime minister for two years until a surprise fracturing of the ruling Liberal Democratic Party in 1993, as profoundly important. That statement reflected a growing view in the administration that the best hope of choking off the 14-month-old Asian crisis is to bring about a long-overdue turnaround in Japan.

But Treasury officials winced at Clinton's characterization because they fear that Japan is still weeks or months away from decisive action, at a time that markets are fraying around the world.

All the early indications from Tokyo were that Miyazawa was arriving in San Francisco with few new ideas, no new plans and only vague promises.

``This meeting was never designed or intended to address the question of a plan,'' Rubin said Friday on a flight to San Francisco.