To Wall Street, there is only one decision President Reagan has to make this summer that has any significance: the appointment of a Federal Reserve Board chairman.
In recent weeks the markets have been preoccupied with ''Volcker-watching.'' They've been tapping sources in Washington for ''inside'' information on whom the President will appoint as next chairman of the Federal Reserve Board. The term of Paul A. Volcker, the current chairman, expires Aug. 5.
Some analysts even contend that a sharp rally in the stock market early this week could be traced to weekend reports that the President would reappoint Mr. Volcker, the favorite son on Wall Street. Whatever the reason for the rally, Dr. Richard Schmidt, associate director of research at Advest, a Hartford, Conn.-based brokerage house, says the President should make his decision soon.
''The reason there is some nervousness in the markets,'' he contends, ''is because Wall Street doesn't know what the President is going to do.''
Victor Melone, senior vice-president and head of the trust department at Manufacturers Hanover Trust Company, agrees: ''If the President is going to reappoint Mr. Volcker, he should do it now. There is no sense in waiting.''
Certainly the brokerage firms have tried to find out if Volcker would be reappointed. Mr. Melone says he recently talked to a Wall Street source who authoritatively claimed to know the chairman ''will not be reappointed.'' But, he says with a laugh, ''I talked to someone else who was equally sure he would be reappointed.''
David Hale, an economist with Kemper Financial Services Inc., a Chicago firm that manages $20 billion, quips: ''It's a joke. Every senior partner on Wall Street seems to have a wife who knows someone who plays bridge with Volcker's wife. There are as many Volcker-watchers now as there are Fed-watchers.'' He adds, ''No one knows what the President is going to do.''
Wall Street knows what it would like him to do: reappoint Volcker. One Wall Street brokerage, A. G. Becker, made a survey of money managers which showed the chairman is their overwhelming first choice.
Ben Laden, chief economist at T. Rowe Price, a Baltimore mutual fund group, says Wall Street gives Volcker the nod because he ''looks like a man who is not politically motivated. . . . Reducing inflation is his highest priority.'' In addition, Mr. Laden says Volcker is ''uniquely qualified'' to deal with the international loan problems.
''Volcker,'' he says, ''is the guy who recognized the problem before, and dealt with it last fall. Without Volcker, maybe people who did not fully understand it would have to deal with it.'' Mr. Melone agrees, noting, ''It's clear that in a time of mounting anxiety about the third world debt, you don't want a new man at that particular helm. You want someone with experience, credentials, and the confidence of the world community.''
Mr. Hale says the markets would greet Mr. Volcker's reappointment ''positively,'' since they like continuity. He points out that any replacement for Volcker might actually tighten monetary policy more than necessary in order to prove himself to the financial markets. And Hale says Volcker has ''a sixth sense'' that allows him to discern the weak links in the financial system.
Should the President choose Alan Greenspan, who heads up the economic consulting firm of Townsend-Greenspan, the basic approach to monetary policy might not differ much, according to Mr. Hale. He believes both men regard trends in long-term interest rates as a guide to how the markets perceive monetary policy. Neither man is a stern monetarist - one who believes the single key to controlling inflation is controlling the money supply. Both tend to discount short-term swings in the monetary aggregates. But Hale points out that Dr. Greenspan is mainly known as a ''GNP numbers cruncher'' and that he doesn't have the experience of Mr. Volcker.
Because of Volcker's experience in managing the Federal Reserve, Dr. Schmidt at Advest says he too would prefer to have him reappointed.
''The post is basically managerial,'' he holds. ''It's not a place for an economist. There is no reason Mr. Greenspan can't be a good manager, but he has a better chance of being a poor manager. Suppose he loses interest in being a good manager. This could be bad.''
In fact, Dr. Schmidt says, he would prefer to see the vice-chairman of the Fed, Preston Martin, appointed chairman, rather than Dr. Greenspan, since he is more used to managing. But in the A. G. Becker survey Mr. Martin came up ninth on the list. Some Wall Street managers believe Martin might be too compliant with a president running for reelection.
Mr. Melone points out that there is some political risk for the President if he appoints a new Fed chairman who does a poor job.
Edward Yardeni, director of economics at Prudential-Bache Securities, holds that Mr. Volcker should not be viewed as a liability. ''The way the economy is going this year and next year, it should not be much of an issue by 1984,'' he says. Dr. Yardeni views the 1984 election as a ''Margaret Thatcher type of situation,'' in which the Democratic Party, like the British Labour party, is in disarray. Fiscal policy will be resolved when President Reagan ''pulls the rabbit out of the hat,'' introducing some new taxes once the economic recovery is established. Thus, pressure would be taken off the Fed.
Rather than see President Reagan replace Mr. Volcker, Mr. Melone says Wall Street would rather have Volcker complete the job of bringing down interest rates and inflation. ''The final chapter,'' he concludes, ''will be the ability to show a noninflationary economic recovery.''