THE DEMOCRATIC senators on the Banking Committee used a hearing yesterday to impress on Paul Volcker their anxiety over the effects of the current interest rates. Mr. Volcker used the hearing to argue that a rapidly rising deficit gives the Federal Reserve Board, of which he is chairman, very little room for maneuver. Both positions were persuasive.

Sen. Donald W. Riegle of Michigan spoke of the "desperate" straits in which month after month of these extraordinary rates has left business. Unfortunately, he pointed out, Congress isn't likely to be able to make any major changes in budget policy until next spring, for it is already coming into the final stages of a short election-year session.

Mr. Volcker argued that the Federal Reserve is trying to conduct a policy that will discourage inflation while simultaneously leaving room for the economy to recover from the current recession. But a lot depends on the relationships between bank reserves, which the Federal Reserve can control directly, and economic growth, which it can influence only indirectly. As Mr. Volcker noted, those relationships have been behaving in peculiar and unpredictable ways since last fall--partly because of technology, and the ways in which the banking system is learning to use computers.

Sen. Paul S. Sarbanes of Maryland angrily asked whether high interest rates had not contributed to the recession and the current unemployment. Yes, replied Mr. Volcker, but you have to ask why the rates are high. That was a reference to the lenders' fears of more inflation ahead. How long, Mr. Sarbanes asked, can the country endure the continued loss of jobs and production? Mr. Volcker answered that he didn't know, but he expects a recovery to get under way later this year. Why doesn't the Federal Reserve act now, Mr. Sarbanes asked, to restore rates to normal levels? That question, Mr. Volcker responded, "assumes we can wave a magic wand" to bring down rates without generating rising apprehensions about more inflation.

Sen. Alan Cranston of California asked whether the tremendous rise in the Treasury Department's borrowing, to finance the growing federal deficit, would make it impossible to bring interest rates down. The Treasury borrowing won't make it impossible, Mr. Volcker said--"but it sure doesn't help."