July 3, 1984

After watching interest rates climb to unexpected heights this spring, many investors and economists are convinced that rates will continue to rise in the second half, although not so much as in the first half. Drawing on a lesson learned in the first 18 months of the economic recovery, when high interest rates failed to damp the expansion, analysts expect continued strong economic growth this year. An expanding economy leads to heavier credit demands from businesses and consumers, and those demands will more than offset any small decline in the still-huge borrowing needs of the United States Treasury. ''The biggest suprise of the first half was how high rates went,'' said Alan C. Lerner, senior vice president at the Bankers Trust Company. In the bond market, where yields rose most sharply, ''investor psychology and inflationary expectations were distinctly negative for the market,'' he added. Investors are still nervous, Mr. Lerner added, but ''it's not likely we will see the same kind of increases in the second half as in the first.''

The chairman of the United States Commission on Civil Rights has charged that President Reagan is playing politics with civil rights. Clarence M. Pendleton Jr., the commission chairman, who was appointed by Mr. Reagan, chided the President in two letters made public today for several recent steps designed to persuade blacks and other minority groups that the Administration had been fair to them. Mr. Pendleton, a conservative Republican from California, asserted that the President's actions ''do mayhem to the constitution and civil rights laws.'' ''I will never knowingly attend any meeting you or members of your Administration convene exclusively for black appointees,'' Mr. Pendleton said in a letter to the President. ''Such meetings are contradictory to what you and I believe about working toward a race- and gender-neutral and colorblind society.''

The rapid acceleration in the drive for a woman as the Democratic Vice-Presidential candidate has created a new set of political complications for women who are activists within the party and for the campaign of Walter F. Mondale. Among the activists, these complications are reflected in the intensifying debate on how to promote the selection of a woman without putting destructive political pressures on Mr. Mondale. Leaders of the feminist movement appeared today to be split into a conciliatory faction that favors polite appeals to Mr. Mondale and a militant faction. The latter group includes prominent women who are speaking of floor fights or walkouts at the Democratic National Convention if Mr. Mondale chooses a man as a running mate.

''A mandatory death statute simply cannot be reconciled with the scrupulous care the legal system demands to insure that the death penalty fits the individual and the crime.

Pressed by the Federal Deposit Insurance Corporation, the management of the Continental Illinois National Bank and Trust Company of Chicago has been rapidly shrinking the bank as part of a strategy to find a long-term solution to its problems. ''No matter how you handle the Continental situation, the bank will have to shrink in size,'' said William M. Isaac, chairman of the F.D.I.C., in an interview yesterday. Mr. Isaac said progress was being made in setting Continental on a solid financial footing, but he said a number of approaches were being considered, ranging from finding a merger partner to allowing the bank to remain independent. According to people in the banking industry, the plan is to reduce Continental's assets to between $20 billion and $25 billion, or about half its size at the end of 1983. The bank's assets then, together with those of the Continental Illinois Corporation, its parent holding company, were $42 billion.