The Federal Reserve, worried that economic growth may not pick up as the Reagan administration expects, has boosted its money supply target for this year to keep the 2 1/2-year-old expansion alive.

In a midyear report to Congress made public yesterday, the central bank said the higher money target would be consistent with "somewhat more rapid economic growth than characterized the first half of the year, as long as inflationary pressures remain contained."

The economy has grown at less than a 2 percent rate so far this year, about half as fast as the administration predicted, and unemployment has not declined.

The Fed policy makers, in a grouping of individual economic forecasts, indicated they expect the gross national product to increase between 2 3/4 percent and 3 percent, after adjustment for inflation, from the fourth quarter of 1984 to the fourth quarter of this year. Similarly, the "central tendency" of their forecasts for 1986 shows real GNP rising at a 2 1/2 percent to 3 1/4 percent rate.

The administration in April said it expected real GNP to expand 3.9 percent during 1985 and 4 percent in 1986. The continued slower growth projected by the Fed officials would create new headaches for the administration, including larger federal budget deficits.

Inflation will be about 4 percent or a little less this year and in the 3 3/4 percent to 4 3/4 percent range in 1986, as measured by the GNP implicit price deflator, according to the Fed forecasts.

Federal Reserve Chairman Paul A. Volcker, defending the higher money target, which some monetarist economists fear could add to inflation, told reporters, "I am as concerned about inflation as I have ever been." The new target does not represent a "yielding on inflation," he declared.

Volcker will testify about the latest policy moves this morning before the House domestic monetary policy subcommittee.

In the midyear report, the Fed expressed continued concern about "the unevenness of this business expansion and the . . . basic structural imbalances in the economy." The central bank said that the manufacturing, mining and farm sectors have been squeezed while other parts of the economy have prospered.

The Fed renewed its call for action to reduce federal budget deficits as one avenue to eliminating these imbalances.

For the second half of this year, the Fed expects the recent declines in interest rates to provide the basis for faster economic growth. But even if real GNP rises at a 2 1/2 percent to 3 percent pace through the end of next year, or possibly even a bit more, the Fed policy makers believe the civilian unemployment rate still would be close to 7 percent, only slightly less than its current 7.3 percent level.

If GNP is 1 percent lower than forecast by the administration through the end of fiscal 1986, the federal budget deficit will be increased by more than $15 billion in fiscal 1986, according to rules of thumb used by budget analysts.

The importance of the Federal Reserve action raising its target for the most closely watched measure of money, M1, lies not so much in the higher target itself as in the way the change underscores the central bank's commitment to economic growth, analysts said.

Even the higher target range could prove too low to be consistent with a healthier economy, the analysts cautioned, but if it does, then the Fed likely would allow the money supply again to move above the target once more, they said.

While the economy was growing very slowly in the first half of this year, M1 shot up at a 10 1/2 percent rate, well above the 4 percent to 7 percent pace targeted by the Fed for this year.

Fed officials more or less ignored the money target because of the sluggish economy, and in the spring began a series of steps designed to reduce interest rates and stimulate the economy.

Officials are uncertain why the usual links between money growth and current-dollar GNP have departed so far from the norm, but the drop in interest rates was undoubtedly a factor, according to the report.

Over the three decades prior to 1982, current-dollar GNP rose an average of more than 3 percent a year faster than M1. Over the last 3 1/2 years, M1 has gone up slighly more than current-dollar GNP.

Technically, the Federal Reserve decided to incorporate most of the first half's money surge into the base from which its future growth will be measured.

The new target range for M1 -- which includes currency in circulation and checking deposits at commercial banks -- is 3 percent to 8 percent, using its second-quarter average of $582.5 billion as a base. Previously, the base was the fourth quarter, 1984, average.

The Fed's policy-making group, the Federal Open Market Committee, set the new target at a meeting last week. The FOMC also set a tentative target range for M1 growth next year of 4 percent to 7 percent.

However, the committee "recognized that uncertainties about interest rates and other factors that affect velocity the ratio of current-dollar GNP to the money supply would require careful reappraisal of the range at the beginning of that year," the report said.

The FOMC also reaffirmed its 1985 target of 6 percent to 9 percent growth for M2, a broader measure of money that also includes savings and small time deposits, most money-market mutual fund shares and other items. It similarly reaffirmed a 6 percent to 9 1/2 percent target for M3, a still broader measure that also includes large time deposits and other items.

For 1986, the same ranges would apply for M2 and M3, except that the upper limit for M3 would be reduced by half a percentage point to 9 percent.

Even the new higher range for M1 assumes that money growth in the second half of this year will run at only about half its pace in the first six months. "This range contemplates a substantial slowing in growth from the pace of the first half," the report said, "and the lower part of the range implies a willingness to see relatively slow growth should the recent velocity decline be reversed and economic growth be satisfactory."

The unexpected shortfall in economic growth compared with money growth in the first half of this year was similar to an experience in 1982 and 1983. At that time the Fed also re-based its M1 target despite warnings from monetarist economists that the rapid money growth would lead to inflation -- though it did not. Such economists are issuing the same kind of warnings now.