More important, they said, are reports on the real economy and monetary aggregates.

Since 1987, it has been the only monetary aggregate with a target range set annually.

The analysts added that they expect further declines in the monetary aggregates next week.

"The Fed has to look at the economy and the extraordinary weak monetary aggregates," he said.

Central banks monitor the amount of money in the economy by measuring monetary aggregates such as M2.

The recent strong growth in the monetary aggregates is seen by many analysts as another indication the economy may be stirring.

The report, issued by the Fed, showed that all three monetary aggregates posted big increases.

It is a particular application of a Divisia index to monetary aggregates.

However, targeting monetary aggregates proved difficult for central banks because of measurement difficulties.

Although the monetary aggregates have been under closer scrutiny in recent weeks, yesterday's announcement had no impact on bond prices.

The Fed will keep pressure on bank reserves, and the growth of monetary aggregates will slow down.

Because of technical factors, most analysts had been anticipating large declines in the monetary aggregates.

What explains the second-half slowdown in the monetary aggregates?

The increase was the third in a row for the monetary aggregates, but analysts said that money-supply growth remained slow.

The money numbers, the sixth straight week of gains for the monetary aggregates, were stronger than most analysts had anticipated.

But monetary aggregates remain a leading economic indicator.

Instead, there are several measures, classified along a spectrum or continuum between narrow and broad monetary aggregates.

The other two monetary aggregates, M-1 and M-3, the broadest measure, also rose strongly.

In between those dates, however, market participants received mixed signals from the Fed about the importance it placed on the performance of the monetary aggregates.

Ahead of the dollar were inflationary pressures, strength of the economy and monetary aggregates.

In its money report, the Fed said that all three monetary aggregates rose during the week ended Oct. 7.

Once monetary aggregates grow too rapidly, central banks might be triggered to increase interest rates, because of the fear of inflation.

The Bank of Japan defines the monetary aggregates as:

The Fed's weekly report on monetary aggregates and reserve data, released yesterday, shows that Republic's need for funds is growing.

Rather, it said the discount rate cut was due to "weakness in the economy, constraints on credit, and slow growth in the monetary aggregates."