The Federal Reserve passed up a chance to raise interest rates Wednesday, despite new evidence of a surprisingly robust economy.

Some economists insisted that a strong economy - with its threat of higher inflation - will force the Fed into action at its next meeting on Aug. 20, but others were not so sure. They argued that the economy may have slowed enough by then to keep the central bank on the sidelines until after the election in November.

The Fed’s decision to leave rates unchanged after two days of closed-door meetings was greeted with relief by financial markets. The Dow Jones industrial average, which had been down almost 38 points on fears of a rate increase, trimmed those loses after the announcement. The Dow ended the day off 17.36 points at 5,703.02.

The Clinton administration, which has made the economy’s performance a key plank in the president’s re-election drive, hailed the Fed’s decision.

“It’s the ideal balancing of a favorable inflationary climate with strong economic performance,” Housing and Urban Development Secretary Henry Cisneros said. “The decision by the Fed to take no action to tighten is, from the housing market perspective, good news, the best news we could have.”

Central bank policy-makers concluded a two-day meeting of the 12-member Federal Open Market Committee, composed of the seven Fed board members from Washington and five regional bank presidents, with a brief announcement indicating rates had been left unchanged.

The federal funds rate, the Fed’s key lever to influence the economy, is 5.25 percent, where it has been since Jan. 31, when it was reduced for a third straight time.

Since then, the Fed has left rates unchanged as the economy has demonstrated a strong rebound after coming to a nearstandstill at the end of last year.