WASHINGTON - Members of the Federal Open Market Committee agreed to keep short-term interest rates unchanged when they met Sept. 21 but split over whether rates were likely to rise or fall, according to minutes of the meeting released Friday.

The vote to keep monetary Policy unchanged was 12-to-0.

In looking ahead, some members of the committee stressed that short-term rates adjusted for inflation were close to zero, suggesting monetary policy "was quite accomodative and probably would need to be firmed at some point," the minutes say. The group saw the need to remain "especially alert to potential inflationary developments.

Other committee members said they expected the economy "might remain quite sluggish for a period" and saw the need to maintain an accomodative monetary policy. The group "could not rule out the possibility the next policy might have to be toward greater monetary stimulus," meaning a reduction in rates.

In assessing the economy, the Fed officials agreed that while business conditions were weak in some localities and industries, general economic activity in most regions ranged from "little change to moderate growth since midsummer." The weakest part of the country remained California.

A few members said there was growing concern in financial markets that stock prices "were high relative to earnings and dividends." Accordingly, some wondered whether the stock market is due for a correction that "could trigger cumulative selling, especially by mutual funds, which had garnered substantial new investors."

A recent survey released by staff members with the Securities and Exchange Commission found that most individual investors holding money market funds through banks do not know that the funds are uninsured. More than a quarter of those surveyed, 28%, thought all funds sold through banks are insured.

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