FOR THE past two years, the Federal Reserve

Board has made economic policy--and economic history--by controlling the growth of the nation's supply of money. But as time passes, the technique is rendering itself obsolete. The policy itself is generating responses that make its key indicators ambiguous and unreliable, and no one is more aware of it than the people who run the Federal Reserve. In a speech here this week, Anthony Solomon, the president of the New York Federal Reserve Bank, described the difficulties now developing and suggested that it won't be long before the country is forced to find another way to steer its monetary policy.

Mr. Solomon was delivering a message to the Reagan administration's Treasury Department, among others, and to its resident monetarists. Monetarism holds that inflation can be controlled only one way--by a firm grip on the money supply. The Federal Reserve had traditionally used the interest rates as its targets in guiding policy, but high inflation in the 1970s badly skewed them. In late 1979, it turned to the present practice of setting the size of the money supply as its target and letting interest rates go wherever the market took them. The market took them extremely high. Those astonishing interest rates in turn quickly began to change the ways in which people thought about money, and handled it.

Monetarism assumes that there is a set of constant relationships between the money supply and the operation of the rest of the economy. By carefully controlling the money supply, the theory holds, the government can manage the economy and, in particular, the inflation rate. Mr. Solomon observed that the process seems to be reversing itself--that the Federal Reserve increasingly is able to influence the size of the money supply only by speeding or slowing the growth of the whole economy. High inflation is rapidly teaching people to carry on their businesses with very little or no money, as money is traditionally defined. The rise of new institutions--the money market mutual funds, for example--are rapidly destroying the meaning of the familiar measures of the money supply and are raising unmanageable questions regarding what's to be counted.

Mr. Solomon's warning acquires additional importance with President Reagan's decision to let his budget deficits rise. The president is now relying on the Federal Reserve's monetary policy as the country's sole weapon against inflation. The higher the deficits go, the greater the strain on monetary policy will become--as, meanwhile, the wobble in the steering mechanism increases.