TWO SEATS ON the Federal Reserve Board will fall vacant in the next six months. When he fills them, President Reagan will have chosen a majority of the board's seven members. That requires him to decide what kind of a monetary policy he wants.
The administration, like economic conservatism in general, is split. The monetarists stand for tight restraint on the money supply to hold down inflation. The supply-siders push for faster growth, with less concern for inflation. Until now, the administration has been in the comfortable position of being able to stand on both sides of the argument. It has been able to blame high interest rates on the Federal Reserve, while simultaneously taking credit for the low inflation that those rates have enforced. Why? Because the Federal Reserve is led by a strong chairman, Paul Volcker, whom Mr. Reagan inherited from the previous administration, and because Mr. Volcker has had the support of a solid majority of the board's other six members.
Now one strong and reliable member of that majority, Lyle E. Gramley, has announced his resignation. The term of another, J. Charles Partee, will expire in January. The question is whether Mr. Reagan, in replacing them, will try to create a new and different majority pulling in another direction against Mr. Volcker.
Mr. Reagan's first appointment to the board, in 1982, was vice chairman Preston Martin. The second, Martha R. Seger, has only recently been confirmed. The votes of Federal Reserve Board members are hardly more predictable than those of Supreme Court justices. But both have occasionally seemed to suggest that they favor more emphasis on growth than the present majority does. That would mean less emphasis on policing inflation.
The Federal Reserve has become a kind of hobgoblin to some in Mr. Reagan's administration and his party -- particularly among the supply-siders. To them, the Fed has emerged as the single all- purpose explanation for the failures of Mr. Reagan's economic strategy. This accusation is particularly strong in the wing of the Republican Party that is gathering around Rep. Jack Kemp and his campaign for the presidency. It is Mr. Reagan's most fervent supporters who will press him hardest to use these appointments to seize control of the Fed and turn its course.
But Mr. Volcker has come to embody the country's commitment to low inflation. Any attempt by the White House to undercut his policies at the Fed is going to be interpreted widely throughout this country and the world as an intentional swing to easy money and, inevitably, rising prices. An administration running budget deficits of $200 billion a year is not in a safe position to risk raising further fears of high inflation ahead.