NEW YORK (CNN/Money) - The much-improved recent economic reports on the labor market and retail sales are fueling speculation that the Federal Reserve could alter its stance on keeping interest rates low, perhaps as early as this summer, according to two separate reports Monday.

Central Bank officials are expected to meet in two weeks, and they could very likely conclude that the turnaround in the economy has garnered enough momentum -- and inflation is a little less tame -- to warrant a rate hike, according to Wall Street Journal.

Robert McTeer, president of the Federal Reserve Bank of Dallas, talks to CNNfn's Kathleen Hays about the possibility of rising interest rates. Play video (Real or Windows Media)

The Fed might not raise interest rates when it meets on May 4, but the agency could signal more "verbal tightening" of monetary policy, or alter the statement that typically follows the meeting to indicate that the conditions for such an increase are falling into place, the report said.

Any changes to the Fed's statement will probably be on triggered by the March employment data that showed a gain of 308,000 jobs far better than Wall Street's forecasts and last week's surprise uptick in the consumer price index (CPI) indicating that the inflation rate has stopped falling.

Separately, the International Monetary Fund (IMF) will warn the Federal Reserve this week that it needs to prepare the world economy for higher interest rates, the Monday edition of the Financial Times reported, after obtaining a draft chapter of a key IMF report.

While noting that the U.S. has "leeway," the IMF will warn in its latest world economic outlook that, "the ground should continue to be prepared for future monetary tightening," the Financial Times reported.

"A key challenge for central banks will be to communicate their intentions as clearly as possible to the markets, thereby reducing the risk of abrupt changes in expectations later on."

Rising U.S. interest rates could trigger severe difficulties in emerging markets, the IMF warns.

After a run of recent upbeat U.S. economic numbers, including surprisingly strong jobs data and retail sales data, markets are betting the Federal Reserve could hike rates as early as August.

Fed Chairman Alan Greenspan will give testimony on the U.S. economy Wednesday, the same day that the IMF publishes its world economic outlook.

On Wednesday, the Washington-based lender will also say that the most significant risk to a brighter world economic outlook was in trying to resolve global imbalances, "notably the U.S. current account deficit and surpluses elsewhere," the Financial Times said.

The IMF warned that: "A more disorderly adjustment (of the U.S. current account deficit) -- including abrupt movements in exchange rates -- could not be ruled out.

"This would have significantly more serious consequences, with potential spillovers into other financial markets, including through higher U.S. interest rates."

The IMF also warned that U.S. fiscal policy, "may impose significant costs on both the U.S. and global economies over the medium term."

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Citing European officials, the Financial Times also said the IMF will strengthen its calls for the European Central Bank to consider cutting interest rates owing to the eurozone's poor economic performance.

The ECB meets Thursday but is not expected to make any monetary policy announcements.

On Friday, Reuters obtained details from the final draft of the IMF's Spring report showing that it had revised up its 2004 global growth forecast to 4.6 percent from a 4.1 percent prediction made in its last semi-annual outlook in September.