Treasury Secretary W. Michael Blumenthal, after meetings with key government and banking officials, today said there was growing confidence among the West Germans in the Carter administration's ability to control inflation in the United States.
Blumenthal told newsmen after a breakfast meeting with West German Chancellor Helmut Schmidt, that he believes "there is a great deal more confidence in the prospect for bringing inflation under control and further stabilization of the dollar than there was a few months ago."
The night before, Blumenthal had dined with the heads of West Germany's seven largest private banks. He emerged from that meeting saying he detected "a kind of cautious optimism" among the bankers.
At his meeting with Schmidt, the chancellor told Blumenthal that Bonn's main concern was that new U.S. financial and monetary policies lead to the kind of results envisioned by the Carter administration: bringing inflation under control, reducing the U.S. budget deficit to $30 billion and stabilizing the dollar.
Blumenthal said that when the U.S. first announced its new economic program to strengthen the dollar last October, it was greeted by questioning and surprise. Skepticism has since turned to optimism, he said.
The Treasury secretary noted, however, that at his dinner with the bankers they "pointed out that such optimism was only justified if the White House maintained throughout this year and beyond the kind of policies set in motion in October." He said the bankers questioned him closely about the pressures on President Carter to continue supporting the dollar or to deviate from the rescue program.
Blumenthal said he told Schmidt the U.S. was determined to follow the current economic policy as long as necessary.