The immovable object, the Federal Reserve Board, shows no signs of getting out of the way of the irresistible force, the Reagan administration, and a conflict may be developing that will set its mark on the midterm election this fall and the political and economic developments that follow.
The quasi-independent, seven-member Federal Reserve Board that works out of a pretentious building not far from the White House warns repeatedly that it is anxious about Mr. Reagan's proposed budget deficits. And it claim it will push down the brakes of tight credit if inflation starts up again.
President Reagan tells the nation confidently that the rate of inflation is coming down, not up, and that what the country needs now is easier money (namely cheaper credit and lower interest rates), which may require Fed cooperation.
Calm, mild-mannered Paul A. Volcker, chairman of the Fed, has just told Congress that what the nation needs is a reduction in deficit spending and that his body can be expected to act promptly if inflation threatens again.
The administration has presented its answer in several ways. In his State of the Union message, President Reagan embraced supply-side economics more strongly than before: the theory that appropriate tax cuts will cause the economy to right itself. More bluntly, Rep. Jack Kemp (R) of New York, spokesman for the supply-side theory, tells chairman Volcker to resign. Treasury Secretary Donald T. Regan takes the Fed to task, too, but on a subsidiary point: He charges that clumsy handling of the money mechanism by the Fed caused sharp fluctuations in the growth of the money supply in 1981 and endangered the economy.
All elements are present for a confrontation, it is believed here, that could be spectacular -- and it comes at a time of anxiety in Mr. Reagan's political coalition.
Most of the public doesn't understand the technical method by which the Fed manipulates money rates. The phrases ''easy money'' and ''tight money'' are used as shorthand. However phrased, the Fed, through its chairman, has repeatedly told Wall Street, the financial community, and the public that there is a relationship between big budget deficits and inflation, and that the Fed is going to intervene if the danger increases. When the Fed was set up, Congress intended that it should be outside the rule of partisan politics. Mr. Volcker has shown no sign of yielding to political pressure.
The financial community must sit on the edge of its chair as this particular fiscal drama unfolds. On Feb. 8, President Reagan fills out the details of his State of the Union message to send his actual budget to congress. Hitherto he has carried a coalition of middle of the road and conservative congressmen with him. Washington waits for the changed script. Instead of ending the deficit in a year or two, the picture looks something like this: for fiscal year 1982, a deficit of $90 billion, a deficit of $90 billion again for 1983, and $78 billion for 1984. The trend will be down, but the deficits continue. It has produced an interval of marked restiveness.
President Reagan asks the nation to look at the $33 billion cut in personal taxes set for July 1. This coincides with the annual increase in social security benefits. As economist Otto Eckstein of Data Resources Inc. puts it: ''Unless the Federal Reserve keeps the economy on the edge of financial disaster month after month, this fiscal stimulus should create strong secondhand gains, led by a surge of retail sales and a major recovery in automobiles. Thereafter, economic prospects will depend critically on financial conditions.''
Sitting in its stately edifice, the Fed has the awesome power to create or extinguish much of the money supply of the country and to make borrowing either more expensive or cheaper. It can influence the money supply in other ways; it can create so-called ''tight money'' or ''easy money'' by buying or selling government securities. Other presidents have felt its power. Now it is Mr. Reagan's problem.