Citicorp Chairman Walter B. Wriston said yesterday that he expects interest rates to decline this year "in a very irregular pattern."
Appearing on the CBS program "Face the Nation," Wriston also said that forcing Poland into default on loans to American banks would push the Eastern European nation into the arms of the Soviet Union. He added that Poland has made partial interest payments on its debt to Citibank recently and that he expects Poland to keep up with its debt service.
"If Poland were to be defaulted, Russia would have achieved the objective which it has been seeking since Catherine the Great, which would be to make Russia Poland's only friend," Wriston said.
While the financial community waits to see if Poland will meet its interest payments, Poland is cut off from the financial marketplace, he said. But he said he expects Poland will make those payments.
Wriston said the money markets are acting strangely, as if the nation "is in some kind of inflationary boom" rather than a recession. If the Federal Reserve Board continues on the course it has set, he said, he expects to see an erratic decline in interest rates.
He was lukewarm in his reaction to the Fed and its policies in some areas, but he said that the agency "is largely responsible for having brought the inflation rate down" and said monetary policy "on balance has been correct and right, but the swings have been too large."
Wriston said that the business community supports President Reagan's programs and views them as successful. "I don't think I would change the prescription" for the nation's economic ills, he said. Inflation has been successfully addressed, he noted, labeling resulting unemployment as an unfortunate side-effect.
He predicted that the economy will begin to pick up toward the middle of the year, which will provide some relief for the unemployed.
Wriston played down the role of deficits in adding to inflation. The U.S. deficit as a percentage of the gross national product is smaller than it is in either Japan or West Germany, but both those countries have lower rates of inflation, he said.