J.P. MORGAN<JPM> SAYS DLR MAY PREVENT FED EASING The relatively high level of real U.S. interest rates suggests that there is scope for further declines in money market rates, but the Federal Reserve is unlikely to promote such a drop as long as the dollar remains volatile, said J.P. Morgan and Co Inc chairman Lewis Preston. He said in response to a reporter's question after the bank's annual meeting that money market rates could decline further but, "I don't think the Fed is going to encourage that as long as the exchange markets are as volatile as they are." On the other hand, he said that, barring a collapse of the dollar, he did not see rates going much higher. He said that Morgan's recent rise in its prime lending rate was "purely a reflection of an increase in a whole spectrum of rates." Preston reiterated earlier company forecasts that the U.S. economy should show roughly 2.5 to three pct real growth this year. He also said that as a consequence of the dollar's decline and oil price rises, inflation would rise "moderately" to a 3.5 to four pct rate in 1987.