President Carter's nominee for chairman of the Federal Reserve Board indicated yesterday he would favor cutting taxes in case of a deep slump, but said he still isn't convinced the economy actually is in a recession.

Paul A. Volcker, now president of the New York Federal Reserve Bank, also said he forsees no decline in interest rates until inflation abates some. And he dammed with faint praise Carter's plan to revive "real wage insurance."

Volcker aired his views at a meeting of the Senate Banking Committee called to consider confirmation of his appointment. Barring any last-minute hitch, the panel seems likely to approve his nomination tomorrow.

The nominee also brushed aside criticism by liberals that he is too close to Wall Street and big businesss. He said the nation needed economic sability first "to deal with . . . unemployment, poverty and all the rest."

And he asserted repeatedly, in answer to senators' questions, that he would remain independent of the White House -- a key concern of some members in the wake of the past month's abrupt Cabinet reshuffling.

Volcker told the panel he still intended to "maintain communication" with the administration on policy issues. But "ultimately," he said, "decisions on monetarry policy are with the Federal Reserve."

The 2 1/2-hour session offered few new insights into the Fed nominee's views. The 51-year-old banker and economists, a former undersecretary of the Treasury for monetary affairs, is well-known to official Washington.

Volcker's reluctance to endorse a tax cut immediately was in line with the views of the Carter administration. The outgoing Fed chairman, G. William Miller, who will become the new secretary of the Treasury, also shares that stand.

Volcker played down his caution about knowledging that the economy is in a recession. He said he was hedging only against the possibility that the economy might revive some following the recent disappearance of gasoline lines.

Volcker also joined both Miller and the White House in urging that if Congress does decide to cut taxes, it consider limiting the reductions to a cut in Social Security taxes and tax incentives to spur business investment.

His comments on interest rates were intended to argue that, with interest, rates are not out of line. He said lower interest rates are "not going to be possible untiil we get inflation down further."

On other topics, Volcker expressed these views:

He called inflation the "top single priority" in the country today, linked closely with the energy problem and the poor performance of investment and, consequently, the productivity of the work force.

He pledges he would "not want to see domestic monetary policy managed (soley) with an eye on international banking," but contended that the dollar will not strengthen visibly over the long run until inflation abates more.

He warned that the nation "Will have to face" the issues of oil-prices decontrol, and argued that officials should agree, "Let's face it and get it over with." But he did not say how quickly decontrol should be achieved.

He waxed lukewarm about Carter's "real wage insurance" plan, which would provide a tax credit to reward workers who heeded the wage guideline. Volcker said he had not yet seen "some practical, workable" version

Volcker's nomination was praised by virtually every member of the Banking Committee. Sen. William Proxmire (D-Wis.) told the Fed chairman designate: "There is no question of your competence and experience."

The only possible snag could come if Sen. William L. Amstrong (R-Colo.) procedural grounds. Amstrong said he favored the Volcker nomination, but believed the public should have more time to react to it.

The Banking Committee is scheduled to vote on the nomination tomorrow. CAPTION: Pictures 1 and 2, Paul Volcker, President Carter's nominee to head the Federal Reserve Board testifies yesterday before the Senate Building Committee. By James K. w. Atherton -- The Washington Post