Interest rates climbed still higher yesterday as Irving Trust, the nation's 14th-largest bank, raised its broker loan rate from 18 percent to 20 1/2 percent.

This could put further upward pressure on the prime lending rate, which several major banks raised from 17 1/2 percent to 18 percent this week.

Analysts say the latest rate rises reflect increses in the cost of funds to banks as the Federal Reserve has tightened credit in an attempt to rein in money growth. The key federal funds rate traded as high as 21 percent yesterday.

The Fed is moving more aggressively than in the past to bring the money supply back within its target growth range, Fed Chairman Paul Volcker said in a meeting with reporters yesterday. The administration has made much of the importance of controlling the money supply and has criticized the erratic swings in growth last year.

It seems that the Fed is responding to the money supply changes by tightening up more quickly when the money supply grows faster than projected, even though Volcker said that week-to-week movements contain a lot of "noise" and may be misleading. Even monthly or quarterly deviations from money growth targets do not have much impact on the economy if they are reversed, he told reporters.

Meanwhile yesterday, the Fed announced that the money supply rose steeply in the week ending April 22. The broader M1-B measure -- which consists of cash and checking accounts at banks and other financial institutions and includes the new negotiable order of withdrawal accounts -- went up from $427.9 billion to $432.1 billion in the week. [Tables on D3]

This has averaged a growth rate of 13.7 percent in the latest statistical quarter, higher than the money growth targets for the whole of the year. However some analysts expect money growth to ease off somewhat as the economy slows.

The narrower measure of money supply, M1-A, rose to a seasonally adjusted average of $365.7 billion in the week ending April 22 from $363.4 billion the previous week, the Fed reported.