WASHINGTON — The Federal Reserve is nearing the end of its 18-month drive to raise interest rates, with most central bank officials saying the number of additional increases needed to tame inflation "probably would not be large," according to minutes of a Dec. 13 meeting released yesterday.

Members of the Fed's policymaking Open Market Committee differed on just how much further tightening was needed, saying the outlook was "becoming considerably less certain" and that future rate moves were more dependent on strength of economic data.

Though economists have widely predicted that the Fed will soon wrap up its campaign, the minutes rallied the stock and bond markets. The Dow Jones industrial average rose 129.91 points to 10,847.41.

"We needed confirmation just to make sure we were on the right page," says Kim Rupert of Action Economics. "We think there are several more (increases) ahead, although we do think they might pause after" the Jan. 31 meeting.

The Fed has been raising interest rates in quarter-point increments since June 2004 to fend off harmful inflation. Short-term rates, which were a low 1 percent in mid-2004, are now 4.25 percent.

Economists, like Fed officials, differ on when the central bank will decide that rates are at a neutral level that neither impedes nor overstimulates growth. Most expect the Fed to raise rates by a quarter point on Jan. 31, which also will be retiring Fed Chairman Alan Greenspan's last day in office.

White House economic adviser Ben Bernanke has been nominated to succeed Green-span.

Some forecasters, such as Global Insight, predict another quarter-point increase in March.

The minutes indicate that some Fed members already consider interest rates within a broad range of the level needed to keep the economy operating close to potential.

According to the minutes, Fed economists expect the economy to slow slightly in 2006 from the strong pace of 2005. Still, output will be near potential the next two years, and the inflation rate should rise in the first half of 2006, due to energy prices, before ebbing again.

Hurricane-related rebuilding will boost the economy in the near term, but that will be muted by rising interest rates and a slowing housing market. At the same time, Fed officials worry that given strong growth and rising factory utilization, inflation could rise if the central bank is not responsive.

David Kelly of Putnam Investments expects a quarter-point move at the Jan. 31 meeting and hopes the Fed stops there. He says the risks of slower growth already outweigh those of higher inflation.

The economy grew at a 4.1 percent annual rate in the third quarter. A report yesterday said manufacturing expanded more slowly last month.