Federal Reserve Board Chairman Paul A. Volcker cautioned Congress yesterday that recent projections of declining federal budget deficits may be wrong.

Volcker told the Senate Banking Committee that predictions of falling deficits from the Congressional Budget Office and the Reagan administration reflect "a very constrained path" for spending.

"There is a difference between assuming that and seeing it develop. . . . Making that assumption not an assumption but a reality will require some very hard choices by the Congress," Volcker said.

The Fed chairman praised the efforts of Congress and the administration to reduce the deficits. But he also indicated that skepticism about how much they will fall is one of several reasons why Fed policy makers have not taken steps to lower short-term interest rates further.

Several committee members urged Volcker to push down interest rates, particularly now that falling oil prices have reduced the prospects for inflation. The Fed chairman fended off the advice by saying that 1986 "is off to a good start" economically, money supply growth has been strong and lower oil prices will give the economy a direct boost.

In addition, Volcker reiterated his worry that the value of the dollar could fall precipitously on foreign exchange markets, which would add to inflation by increasing the cost of imports and make it more difficult for the United States to raise the money abroad needed to finance its trade deficit.

The dollar, he declared, is "approaching a danger zone in terms of market psychology. . . . We don't want, in effect, to have people wanting to get out of the dollar."

The CBO projection of falling deficits was released earlier this week by Director Rudolph G. Penner. The so-called baseline projection -- indicating what would happen to budget receipts, spending and deficits if no changes were made in current laws -- show the deficit falling from an estimated $208 billion in fiscal 1986 to $104 billion by 1991.

The estimates assume that, between now and 1991, the economy will expand steadily at more than a 3 percent rate each year after adjustment for inflation, that civilian unemployment -- now 6.7 percent -- will fall to 6 percent, that inflation will remain below 4.5 percent per year and that short-term interest rates will fall gradually with three-month Treasury bills down to 5.4 percent by 1991.

In his testimony yesterday, Volcker said it would take substantial increases in productivity for the economy to grow at more than a 3 percent rate for the next five years while the civilian unemployment rate drops only to 6 percent. Productivity growth of nonfarm businesses was zero last year.

The CBO's explanation of its projection points out that, with faster economic growth and more inflation in coming years, the budget could have a $70 billion surplus by 1991 -- with the same assumptions about spending.

On the other hand, if the nation drops into a recession next year, with the gross national product falling slightly in 1987 and 1988, but then bouncing back in 1989, the deficit picture would worsen sharply. This low-growth alternative would leave a $237 billion deficit in 1991.

A change in the baseline assumption about defense spending would also have significant consequences for future deficits, a comparison of the administration and CBO projections shows. Since defense-spending choices are, to some extent, made year by year, there is no single correct way to project what happens on the basis of no change in current law, budget experts point out.

In setting its baseline for defense spending, CBO is guided by the latest expression of congressional policy on the matter. Thus, in its last set of budget projections, published in August 1985, CBO assumed that defense outlays would rise about 5 percent a year faster than inflation because that was what was included in the 1985 congressional budget resolution.

But Congress has adopted a 1986 budget resolution that called for no real growth in defense spending this year and 3 percent in future years. After adoption of that resolution, however, actual defense appropriations totaled $16 billion less than that allowed in the resolution. CBO interpreted that as an expression of congressional intent that there be no real increase in defense spending over the next five years.

This change in the CBO baseline, which may or may not reflect future congressional actions, lopped $87 billion off the deficit estimate for 1991.

The Reagan administration budget for fiscal 1987 projects a very different defense-spending trend: It predicts the cuts in last year's appropriations will be made up and spending will then rise 3 percent faster than inflation each year.

In 1991, the CBO defense figure is $362 billion, while the administration's is $406 billion. Cumulatively over the next five years, the higher defense-spending track -- if not offset by domestic cuts proposed by the administration -- would add nearly $200 billion to projected deficits.

Volcker said that the sudden shift in deficit projections showed that such calculations are "very fragile." The deficit problem, he warned, is not "last year's problem. It's very much with us."