Walter B. Wriston, chairman of Citibank, predicted yesterday that both short-term and long-term interest rates will come down in the months ahead but he would not say by how much.

Right now interest rates "have a life of their own" with financial markets "in the hands of the traders," Wriston said in an interview on the NBC television program Meet the Press.

Rates are "unhooked from the economic reality of the country today" with their level much higher than the traditional arithmetic of the inflation rate plus "2 percent or 3 percent" would indicate, Wriston declared, adding financial markets will adjust to this "economic reality over the course of the year."

Wriston, whose New York bank is the largest in the nation, acknowledged that the country is in "a temporary period in which there are real problems in the economy," but he said he believes President Reagan's economic policies along with tight control of growth of the monetary aggregates by the Federal Reserve will produce major improvements.

The bank chairman also said money market mutual funds should not be required to set aside part of their assets as reserves as proposed by Fed Chairman Paul A. Volcker last week. Instead, Wriston said banks and thrift institutions should be freed of regulations that prevent them from paying market level interest rates on deposits.

Wriston denied reports that the government of Kuwait had removed Citibank as manager of its U.S. investment portfolio. The reports alleged Kuwait had done so because the bank was following on overly conservative investment strategy.