FED BOOSTS SHORT-TERM RATES The Federal Reserve moved yesterday to increase short-term interest rates for the third time this year. The move is certain to drive a variety of business and consumer rates higher. The Fed's last two increases, in February and March, sent Wall Street into a tailspin. In yesterday's brief announcement, Federal Reserve chairman Alan Greenspan said the central bank ``will increase slightly the degree of pressure on reserve positions. This action is expected to be associated with a small increase in short-term money rates.'' That wording matched the two previous announcements of rate increases and led analysts to believe that the Fed has moved to increase its target for the federal funds rate, the interest that banks charge each other, by another quarter point, putting it at 3.75 percent. The previous two increases boosted short-term rates from 3 percent to 3.5 percent. PLO-Israeli talks
Two PLO delegates who stormed out of peace talks with Israel Sunday returned yesterday, but their chief negotiator said discussions were still in trouble, especially over an Israeli amnesty for Palestinian prisoners. The Palestine Liberation Organization is insisting that the amnesty cover militants from the Muslim fundamentalist group Hamas, which opposes the self-rule talks. Patriot missiles in Korea
Two US ships carrying Patriot air defense missiles arrived in South Korea yesterday as part of US moves to boost the South's defenses against North Korea. The two ships docked at the port of Pusan amid tight security. A defense ministry spokesman would not confirm the arrival. Northwest cuts summer fares
Summer sales on air travel have begun with Northwest Airlines announcing plans to cut fares for the season by up to 40 percent. The fares announced Sunday are good for trips between May 18 and Sept. 12 in all states except Alaska, and in Canada; Cancun, Mexico; and the Caribbean, excluding San Juan, Puerto Rico. UN funds stolen
The UN said yesterday that $3.9 million had been stolen from the headquarters of its peacekeeping operation in Mogadishu, Somalia, the ``worst case'' of theft yet for UN forces there. Kidder Peabody firing
Kidder Peabody & Co. fired its chief government bond trader, Joseph Jett, after uncovering fraudulent trading apparently intended to inflate the firm's profits. Following the shocking findings, Kidder said that $350 million in profits it had tallied in the last year never existed.