A key administration official yesterday warned West Germany that the Federal Reserve System "will not follow them into deflation" by duplicating the recent burst of higher interest rates in that nation.

"We are not going to sit back and let them raise rates, and have them expect that the Fed here will follow along," said the official, who asked not to be identified.

The sharp comment came just a day after Treasury Secretary James A. Baker III said that higher West German interest rates had violated the spirit of international agreements among the United States, West Germany, Japan, France, Italy, Canada and England -- known as the Group of Seven.

As of late yesterday, there was no response from Bonn to Baker's Thursday charge. An administration official said there were no plans for an early G-7 meeting -- or of the G-5, which excludes Italy and Canada -- in an effort to resolve the dispute.

Although a widening of interest rate differentials between the United States and West Germany could lead to a lower dollar exchange rate against the mark, the official who spoke to The Washington Post yesterday said that Baker's "shot across the bow" on Thursday was not an effort to talk the dollar down.

He denied a published report that the United States "may force" the dollar down. When asked if the United States could tolerate a lower dollar "if the markets took it there," an administration official said: "Yes, if the Germans don't stop squeezing their {economic} growth."

In other words, if the West Germans persist in raising interest rates, the Reagan administration is prepared to assert that the Louvre Palace accord among the major powers does not require it to support the dollar-mark relationship contained in that agreement by following the West German interest rate pattern.

Meanwhile, French officials reportedly are also upset over the West German move to higher interest rates, fearing it will have a depressing effect throughout Europe.

American officials make clear that allowing the dollar to dip against the mark is not the course they would opt for. They recognize that will increase the dangers of inflation and help shatter the kind of exchange rate stability to which they have been pointing with pride since the Louvre agreement -- and reiterated as recently as last month's World Bank/IMF meeting.

But they say that would be preferable to a further run-up of interest rates here -- rates that Baker said Thursday already are at unjustifiably high levels.

Baker prompted speculation about tense relationships between Bonn and Washington by referring to the possible need for "adjustments" in the Louvre Palace accord of February, 1987, because of the rise in German interest rates. He is known to think that higher interest rates in Germany are not compatible with the German pledge to expand economic activity.

He also revealed for the first time on Thursday -- probably unintentionally -- that the United States and Japan last April had adjusted their Louvre agreement on the dollar-yen rate that would be defended by market intervention.

Exact definitions of the "target" exchange rates agreed upon -- or even the fact that such targets exist -- have never been released or acknowledged. But in the Louvre meeting, according to sources, the acceptable yen-dollar rate was set by the finance ministers at about 150 yen to the dollar.

It stayed close to that for some weeks. But with the Japanese trade and current account surpluses continuing to rise, the yen soon started to soar, and broke the 140 yen barrier at 139.50 yen to the dollar on April 14, touching a high of 138.10 yen on April 27.

After a meeting between Baker and Japanese Finance Minister Kiichi Miyazawa, the yen moved down to 140 to the dollar, and has not climbed above that level since.

The inference drawn from Baker's reference to the "substantial yen-dollar adjustment in April" is that 140 yen to the dollar was selected as the new target zone. For the Japanese, it was not as happy an arrangement as the 150-yen target of the Louvre. But it was an American commitment that the U.S. would join forces to prevent the Japanese currency from getting stronger than 140 to the dollar. Japan, meanwhile, agreed to improve its economic stimulus package.

In his press conference Thursday, Baker said, "I would refer you to that {major change} as an example of what I'm talking about" when he mentioned that the Louvre accord could be used flexibly to respond to higher West German interest rates.

But this time, presumably, the change would be to let the dollar weaken -- only against the West German mark.