SAN FRANCISCO -- Remember the days when people hung on every word from

Fed

Chairman Alan Greenspan as if his utterances were direct from heaven? Greenspan's halo has been tarnished a bit in the past two years, but he's still the living embodiment of those old E.F. Hutton commercials: When he talks, people listen.

Today, Greenspan is scheduled to appear at the Bay Area Council's Outlook 2000 Conference here. Unlike

yesterday's Greenspeak, the chairman is expected to discuss the state of the economy and, by extension, give some indication on the future course of monetary policy.

Many traders believe that speeches earlier this week by various Fed governors have been designed to prepare the market for Greenspan to make the case that additional Fed rate cuts are likely.

But "contrary to what financial market participants believe, the Fed doesn't operate as a conspiracy theory," according to Mickey Levy, chief economist at Banc of America Securities. "That's not how the process works under normal conditions."

Whether we live in normal times is debatable -- we are at war and in the midst of a recession, after all. Levy noted that most regional Fed bank presidents accept speaking engagements months in advance and contended they "very rarely" discuss what they're going to say with other Fed cohorts.

"If

Greenspan talks about the economy, I think he'll give an evenhanded talk -- there are still major concerns

but we're starting to see signs of the economy stabilizing," the economist said.

Assuming he does do that, Levy said "it wouldn't change my view" about what he expects the FOMC will do when it next meets on Jan. 29-30: Stand pat.

Fed fund futures are pricing in only about 25% odds the Fed will ease this month, but that's up from near 0% at the start of the year, noted

RealMoney.com

contributor Brian Reynolds.

This morning's steeper-than-expected drop in the Producer Price Index certainly gives Greenspan ample cover to hint at the need for still-more monetary stimulus, should he choose to do so.

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.