Tennessee Sen. James R. Sasser, now a leading Democratic Party spokesman, voted against Federal Reserve Board Chairman Paul A. Volcker's 1983 reconfirmation in protest against his tight money policy and "infatuation with monetarism."

But, Sasser told me, he now realizes that, "in the present uneven economic climate, especially on the international scene, we need a guy with Volcker's savvy running the Fed."

Belatedly, after having provoked a crisis by building up a 4-to-3 anti-Volcker majority with its newest appointments to the board, the White House appears to have come to the same conclusion: It has more to lose than gain by forcing Volcker out.

In an interview with The Washington Post last week, White House chief of staff Donald T. Regan not only said there is "no reason" for Volcker to quit, but also did not rule out the possibility he might be offered a third term in mid-1987.

Give the Reagan White House credit for a swift about-face. It made a quick assessment of how a Volcker resignation would be regarded in world financial markets as well as by moderate politicians of both parties who credit Volcker -- along with collapsing oil prices -- for success in bringing down inflation.

The Regan interview was intended as an olive branch to Volcker, who learned of the cease-fire when he read his morning newspaper. To drive the point home, Regan assured both Volcker and the financial markets that the president would not name one of Volcker's most ardent critics, Economic Council Chairman Beryl Sprinkel, to the Fed seat left vacant by the resignation of Vice Chairman Preston Martin -- the leader of the anti-Volcker revolt.

To the Washington political community, conditioned to believe that Regan for years has been after Volcker's scalp, it was a dramatic turnaround. And if the politics of the peace offer were clear enough, some of the mechanical elements of the story remain a puzzle.

Regan told me that the four Reagan appointees who outvoted the Volcker trio on Feb. 24 had "backed off," giving Volcker a chance to do what he wanted: "orchestrate" a coordinated discount-rate dip with Japan and West Germany.

But why did they back off? All that is known for sure is that one of the four new governors, Wayne Angell, had second thoughts. Within a few hours, he called Volcker to request a new board meeting at which the first vote was canceled. A press release scheduled to be issued at 4:15 p.m. that day was withheld.

But Angell hasn't said why he changed his mind. He angrily denies a published story to the effect that his arm was twisted by Treasury Secretary James A. Baker III. Baker has been working hand-in-hand with Volcker to solve the Third World debt crisis and to coordinate action on exchange and interest rates.

Even if Baker was tactful enough not to approach Angell directly, it is reasonable to believe that word of a probable Volcker resignation got back to Angell through the Fed grapevine. That's a resignation Angell would not have wanted to provoke.

Without question, a Volcker walkout would have been a blow to Baker, who in the past year had been trying to soften the well-known hostility of Regan and Sprinkel. Publicly and privately, Baker has been saying that "Volcker is doing a good job." There is no doubt that Baker wants Volcker to finish out his term, and to do so with his high credibility in financial markets intact.

For the moment, everyone has backed away from confrontation. Volcker, for his part, went through with the discount rate decrease on March 7. His real preference might have been for the Japanese and West Germans to lower their rates, while the United States held steady -- the better to avoid a collapse of the dollar. He is likely to go along with a further easing of interest rates, given the near-total absence of inflationary pressures.

Martin's unprecedentedly eager campaigning for the top job did him little good at the White House. He will be gone at the end of this month and, without him, the Gang of Four is deprived of a leader. Yet, Volcker's dominance at the Fed has been successfully challenged.

There remains a real problem because the board as now constituted is weak. Sasser complains that recent Reagan appointees have been "lightweights." That could be a bit harsh, but it is certainly true that recent appointees have not added enormous prestige on matters relating to international financial questions.

On those issues, the most experienced on the current board is Volcker himself. Henry Wallich, who has been the board's more-or-less regular representative at meetings with other central bankers in Basle, has returned after a serious illness, but may not be up to full speed. Emmett Rice's long career includes international experience, especially on the development side.

But the experience of all four of the Reagan appointees has been concentrated on the domestic economy, mostly in banking. Angell brings some welcome expertise on agricultural problems.

Said former board governor Andrew Brimmer in an interview: "On a scale of 1 to 10, where 10 represents excellence, I would rate the present board no better than a 5, against the recent average of maybe 8.5."

If Regan's olive branch is to be more than a gesture, Martin's replacement should be someone who not only is not hostile to Volcker, but also is a person who can bring some experience to the board in the field of the dollar and currency exchange rates. Robert Tuttle, director of presidential personnel, is the man who's doing the scouting for Don Regan. But you can bet several hundred yen that Jim Baker will also have some ideas.