Washington ? Going against conventional wisdom, the Federal Reserve is raising interest rates in an election year. And it is Fed Chairman Alan Greenspan, a Republican, who is leading the charge even though an incumbent Republican in the White House is facing voter unrest about the state of the economy.

And in what is seemingly the strangest twist of all, President Bush and his economic team are not criticizing the moves, but rather are pointing to the rate increase as a sign of economic strength. To demonstrate support for Greenspan, Bush renominated him for a fifth term just shortly before the rate increases began in June.

So what’s going on?

Many economists believe the younger Bush, mindful of his father’s rocky relations with Greenspan, has gone out of his way to establish a cordial working relationship with the Fed chief. They also say times are different now.

“When Bush’s father was running for re-election, he had an economy that just didn’t seem to be coming out of recession. This time around the recession started earlier and that has allowed the economy to turn the corner before the election,” said David Wyss, chief economist at Standard & Poor’s in New York.

Still, the economy has 1.1 million fewer jobs now than when Bush took office, allowing Sen. John Kerry, Bush’s Democratic opponent, to contend that Bush’s jobs record is the worst since Herbert Hoover. And while job growth did rebound to respectable levels earlier this year, job creation has nearly stalled out the past two months, with just 32,000 jobs created in July.

Yet Tuesday when the Fed raised a key interest rate by a quarter-point, the administration’s response was to say it respected the Fed’s independence — a far different approach than the one taken by the elder Bush.

Elder Bush vs. Greenspan

Bush’s father blamed Greenspan for contributing to his defeat in 1992 by failing to cut interest rates quickly enough to generate a strong recovery before voters went to the polls.

President Bush speaks to supporters Friday during a campaign stop in Beaverton, Ore. Although the economy is a key issue in the November elections, the Federal Reserve has raised interest rates, which could harm Bush's campaign.

The earlier Bush administration certainly tried to pressure the Fed to speed up its interest-rate reductions in the year leading up to the 1992 election. At one point, Nicholas Brady, Bush’s Treasury secretary, grew so annoyed with Greenspan that he abruptly cut off his weekly meetings with the Fed chief.

Such an effort was nothing unusual in the long history of often-strained relations between the White House and the Federal Reserve.

One of the most famous incidents involved the legendary William McChesney Martin, the only Fed chairman to have served longer than Greenspan’s 17 years. Martin was Fed chief from 1951 to 1970, a period spanning the terms of five presidents, from Harry Truman to Richard Nixon. In 1965, President Lyndon Johnson summoned Martin to LBJ’s Texas ranch to express his displeasure about a recent Fed rate increase. As part of the lobbying, Johnson took Martin on a jolting drive around the ranch in Johnson’s Lincoln Continental.

But Martin stood his ground.

Friendlier terms

In contrast, the current occupant of the White House made it a point to have his first meeting in Washington after winning the disputed Florida election in 2000 with Greenspan. Then in April 2003, more than a year before Greenspan’s term was up, Bush announced that he planned to nominate him for a fifth term this year.

When the Fed announced June 30 that it was boosting interest rates for the first time in four years, the administration uttered not a word of criticism, but simply pointed out that a stronger economy often results in higher interest rates. After the second rate increase last Tuesday, the Bush campaign e-mailed out excerpts of the Fed’s rate increase announcement, noting references to an expected rebound in growth.

But other economists say the Bush administration’s hands are tied. With Bush running for re-election on the basis that the economy is growing stronger under his leadership, any criticism of the Fed for jeopardizing what is supposedly a solid recovery could backfire.

“The administration is in a bit of a political bind. They can’t complain about the Fed without saying the economy is doing poorly, something they don’t want to say,” Wyss said.