Short-term interest rates rose Thursday on more talk about a tightening of monetary policy.

CNBC, a financial news network, reported that the Federal Reserve voted last week for a tighter monetary policy.

In addition, the network reported that the Fed decided to raise its target for the federal funds rate by one-quarter percentage point to 3.25% if inflation, excluding food and energy prices, grows by more than 4% this month.

At 4 p.m. in New York, the discount rate on the one-year Treasury bill was up 10 basis points to 3.42%. The yield on the Treasury's two-year note rose to 4.24% from 4.14%.

Long-Term Rates Stable

Longer-term rates showed less reaction to the news. The yield on the 30-year Treasury bond rose to 6.92% from 6.91%. On the 10-year note, the yield rose to 6.09% from 6.08%.

CNBC attributed its report to a senior Fed official. The Fed does not divulge the results of its monetary policy deliberations until six weeks after the meeting.

The network reported that at last week's meeting of the Fed's policy-making Open Market Committee, 10 members voted to shift from an easier to a tighter monetary policy.

In addition, the network said one member voted for an immediate tightening, while another backed a neutral stand.

Concern about an expected House vote on President Clinton's economic program, scheduled for after press time, and the weekly money supply report also put pressure on Treasuries.

The bond market had rallied the day before, with the 30-year bond gaining more than a point in price after a successful auction of five-year Treasury notes.

"There was some profit-taking on the long end after Wednesday's run-up," said Kevin Flanagan, money market economist at Dean Witter, Discover & Co.

Dollar Continues to Drop

The dollar weakened to another record low against the Japanese yen, despite several attempts by the Fed to support the currency. At 4 p.m. in New York, the dollar was at 197.15 yen, down from 108.50 on Wednesday.

But blue-chip stocks rose to another record. The Dow Jones industrial average gained 14.67 points to 3,554.83.

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