Baldrige Also Wary: Regan Scores Fed for Tight Credit Policy
Treasury Secretary Donald T. Regan yesterday stepped up the Reagan administrationÛªs attack on the Federal Reserve Board, warning that its tight credit policies, which the White,House blames for rising interest rates, will begin hurting the economy by November.</br></br>Regan, talking to western Massachusetts business people, said he hoped the Fed wouldnÛªt continue its tight credit policies much longer. If it does, Regan said he feared the Fed .would choke off the recovery.</br></br>Regan asked rhetorically whether the administration was. worried about the FedÛªs policies. ÛÏYou bet your life this has us worried,Û Regan said.</br></br>Separately, Commerce Secretary Malcolm Baldrige also questioned the FedÛªs activities, telling reporters that he hoped the. monetary authorities had not overreacted to strong growth in the first quarter because the economy already is slowing and should grow more moderately the rest of the year.</br></br>On Tuesday, major commercial banks raised their prime lending rate from 12 percent to 12.5 percent, the third hike in less than two months. The White House immediately blamed the Fed, saying it was not supplying enough credit to maintain economic growth.