Federal Reserve Board Chairman G. William Miller's resistance to a significant tightening of monetary policy won endorsement last night from Chase Manhattan Bank Chairman David Rockfeller.
At the bank's annual Washington dinner-press conference, Rockfeller said Miller "correctly" had opposed "dramatic" changes in Federal Reserve policy. For the first time in a series of such press functions over the years, Rockfeller's remarks were on the record.
Miller has come under public and private pressure from Carter administration officials to adopt a more austere money policy in order to signal a continued commitment to fighting inflation.
In a Washington Post interview and similar statements to other publications recently, Miller has said that for the time being he sees no need to change the present policy stance of the Federal Reserve. He fears that too precipitious a move could create a severe recession.
Rockfeller said last night that he favored "a modest continued pressure on money and credit," and that the economy could probably stand "a little more tightening before we relax."
"In going around the country, one sees a vigorous economy. So perhaps the economy need s a little further indication of [the wisdom] of slowing things down."
He rejected the view, put forward by administration officials, that interest rates need to tbe boosted because business inventories are getting out of hand. Inventory building, he said, "is not dramatic."
The New York bank executive noted that "at the end of the last expansionary period, tightening [of money policy] produced a harmful [business] crunch." He added that Miller therefore was reluctant to push, interest rates up sharply, favoring instead "a gradual course."
Rockfeller said it was his understanding that the Fed at Tuesday's Open Market Committee meeting had decided not to make "a decisive tightenging move." But he acknowledged that this was only an impression from reading the newspapers, and was not based on a direct source of information.
On other matters, Rockfeller:
Said inflation will go up further before coming down, and will not decline to an acceptable level for at least two to three years.
Praised the administration's Nov. 1 dollar support program. "It has demonstrated to dollar holders that this country is prepared to support the dollar," he said. (SECTION) aid that Saudi Arabia is troubled by American failure to provide political asylum for the shah of Iran. "It creates in the minds of other people some doubt on how dependable we are," Rockfeller said.