The Congressional Budget Office forecast yesterday the economy will fall into a mild recession later this year, and warned that Congress will not be able to meet President Carter's $29 billion deficit target without making the downturn worse.

Meanwhile, Federal Reserve Board Chairman G. William Miller indicated that if a recession occurs, the Fed will try to bail out the economy by easing money and credit policies. He urged the lawmakers not to enact costly new anti-recession programs.

The CBO assessment was a setback for the administration. Carter has insisted his $29 billion deficit target can be reached without throwing the economy into a recession. Overall, the White House's economic forecast is more optimistic than CBO's.

The CBO said if its forecast of the economy proves correct, Carter's new budget would result in a deficit of $41 billion -- primarily because of higher unemployment benefit payments and other spending.

Alice M. Rivlin director of the nonpartisan budget office, told a hearing of the House Budget Committee that if Congress wanted to meet Carter's $29 billion deficit traget it would "have to recommend deeper spending cuts than proposed by the president," a move she said would only worsen the recession.

Rivlin urged the lawmakers to seek only to hold spending levels below a specified ceiling, and "not focus on a deficit target." She also predicted it would be "impossible" for Carter to virtually balance the budget by fiscal 1981, as the president has forecast.

It was not immediately clear which forecast would be followed when the Budget Committee begins drafting the new congressional budget resolution later this spring. Panel Chairman Robert N. Giaimo (Dc/onn.) questioned whether CBO was too pessimistic, but did not challenge its figures.

Miller's promise to ease money and credit policies if the economy falls into a recession was unusual. The central bank chief told the Budget Committee: "We do not desire a recession, but we do confirm there is a risk of one."

The assurance came as part of an effort to persuade the lawmakers to hold to a tight budget even if the economy slumps. "I would highly recommend," Miller said, "that we look at it in terms of monetary ease to get us back, rather than to pump-priming..."

The CBO economic forecast was decidedly more pessimistic than the Carter administration's projections. The White House forecast, also published yesterday in the president's economic report, calls for the economy to slow to a 2.25 percent growth rate this year, with inflation easing to 7.5 percent and joblessness rising to 6.2 percent.

By contrast, CBO is predicting the economy will grow by only 1 percent in 1979 -- an average that includes two consecutive quarters of decline late in the year that would constitute a recession. The agency says inflation should remain at about 8 percent, with joblessness rising to 6.8 percent.

Miller indicated yesterday the Fed generally agreed with the administration's more buoyant growth forecast, but said he thought the White House was "a bit optimistic" on how far inflation might ease. Miller predicted prices would rise about 8.25 percent this year; they rose 9 percent last year.

Both Miller and Rivlin damned with faint praise the administration's new proposal for a "real wage insurance" tax credit, which will be considered on Monday by the House Ways and Means Committee. Miller proclaimed himself "neutral" on it. Rivlin said the jury still was out on the plan.

On other topics, the Fed chairman:

Confirmed there was "a general consensus" within the Fed and the administration that "credit controls would not be appropriate," despite pleas by some liberals to impose them immediately. Miller said he and White House officials had discussed the issue, "but not in depth."

Criticized California Gov. Edmund G. (Jerry) Brown's proposal for a constitutional amendment mandating a balanced federal budget as "an unwise course to follow" because it would tie policymakers' hands. Miller termed it "somewhat of a cop-out on our responsibilities."