Despite a lull this week in the recent frenetic activity of the money supply, most analysts except the Federal Reserve to tighten monetary policy further because the level of money still remained sharply higher than it was a month ago. A tighter policy probably would lead to higher interest rates.

Already, open market interest rates are about two percentage points higher than in mid-July, and major banks have raised their prime rates from 11 percent to 11 1/2 percent in two steps -- one last week and another this week.

The Fed reported today that the money supply (essentially cash and checking accounts) grew only $100 million in the week ended Aug. 20, from a revised $378.6 billion to $378.7 billion.A slightly wider definition of money rose $200 million, from $400.4 billion to $400.6 billion.

"Monetary growth rates are still quite excessive, but the fact that there was no further growth to speak of this week will probably" not upset the money markets more, said Nicholas Marrone of the Bank of New York.

In the week ended Aug. 6, the money supply grew a record $8.2 billion, and after the Federal Reserve received further data it was revised to a $9.6 billion increase. Last week the Fed reported that the money supply declined $3.6 billion and in today's report revised that decline to $4.3 billion.

Even with last week's steep decline and this week's negligible increase, the money supply has been growing at an annual rate of 12 1/2 percent in the last four weeks, well in excess of the Federal Reserve's target rate of 7 percent. f

If the money supply grows too fast, most economists agree that it contributes to worse inflation. Similarly, if the money supply grows too slowly, it can trigger a recession.

The Fed's report on the money supply had almost no impact on the money markets today because nearly all traders had closed shop by the 4:10 p.m. announcement to head off for the Labor Day weekend.

The Fed did get some other favorable news as well. While there was a slight increase in bank loans, overall short-term credit demands declined. That should ease pressure on the need for the Fed to withdraw funds from the banking system to stem money growth. The central bank attempts to keep monetary growth on its target path by either adding reserves that banks can make loans off or absorbing reserves.

Short-term interest rates have risen so much in recent weeks, however, that most analysts expect banks will be forced to raise their prime rates, the interest they charge their best corporate customers for a short-term loan, to 11 3/4 percent in the near future, perhaps next week.