Analysts expect Fed to signal future rate increase

The Federal Reserve is likely to take an initial step toward higher interest rates at its meeting today, analysts said Monday, citing recent optimistic comments by Chairman Alan Greenspan.

These analysts don’t believe the Fed will actually raise rates at Tuesday’s meeting, but they are looking for the central bank’s public statement to send a strong signal that future rate increases are on the way.

The reason for this view? The economy, which slipped into a recession for the first time in a decade last year, has started 2002 with a surprising amount of strength.

“There is no question that the rebound has been stronger and is coming much earlier than many of us anticipated,” said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis.

Germany: Andersen, KPMG officials discuss merging outside U.S.

Officials of the German divisions of Andersen and KPMG said Monday the two accounting giants are in talks about merging their operations outside the United States.

Several European divisions of the Andersen accounting network said Monday they aim to quit the international firm amid an investigation into the collapse of the U.S. energy giant Enron Corp.

Some have had merger talks with the other Big Five accounting firms that dominate the global market.

“We are currently exploring how our current business activities outside the United States in the most important countries of Europe, Africa, the Near East, Canada, Asia and Latin America can be merged,” Harald Weidemann, head of KPMG Germany, said in statement issued by the two companies.

Energy: Aquila to buy interest in British electricity firm

Energy wholesaler Aquila Inc. will pay utility FirstEnergy Corp. $264 million for a majority interest in a British electricity concern, the companies said Monday.

Kansas City, Mo.-based Aquila said it will purchase a 79.9 percent stake in Avon Energy Partners, a holding company for Midlands Electricity.

Midlands operates a 38,000-mile electricity distribution network providing power to 2.3 million customers in six British cities.

The previously announced deal was finalized Friday and must still gain regulatory approval, the companies said. The sale is expected to close in mid-April, Aquila said.

Securities: Treasury rates increase

Interest rates on short-term Treasury securities rose in Monday’s auction.

The Treasury Department sold $13 billion in three-month bills at a discount rate of 1.840 percent, up from 1.825 percent last week.

An additional $13 billion was sold in six-month bills at a rate of 2.070 percent, up from 2.020 percent.