West Germany's interest-rate increases might "lead to a small reduction in the dollar," a senior Administration official said today.

But regulators and analysts say that the industry's decade-long push to reduce its vulnerability to interest-rate increases is paying off.

Such interest-rate increases are already being noticed by consumers.

"The European Central Bank could be forced to react with interest-rate increases."

Traders and investors are focusing on when and how large the next interest-rate increase by the Fed will be.

A tax cut will stimulate the economy further, prompting the Federal Reserve to compensate with a larger interest-rate increase.

He warned that additional interest-rate increases would trigger a recession for the city next year.

The stock market declined yesterday for the fourth consecutive session, and the fifth in six days, as traders continued to worry about another interest-rate increase.

"Reserve conditions" and "further monetary tightening" both can be read as interest-rate increases.

In recent weeks, though, concerns about a third interest-rate increase by the Federal Reserve Board have been a drag on the markets.