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The Federal Reserve has, in general, been stingy with the money supply ever since October 1979, when it abruptly changed operating procedures in an effort to halt inflation. Before that watershed date, the Reserve Board had expanded the money supply fast enough to keep interest rates from rising rapidly. When that policy proved inflationary, it shifted to a strategy of slowing money growth and letting interest rates move more freely.

A tight money supply, though, is only part of the puzzle. Some experts, including Felix Rohatyn, a partner in the Lazard Frères investment banking firm, argue that loan demand is still putting intense pressure on interest rates. While the high cost of money has discouraged mortgage seekers and auto buyers, corporations are still queuing up to borrow. The volume of commercial and industrial loans at large banks has risen at an annual rate of 22% in the past month.

Many companies are losing money so fast that they must borrow to pay salaries and other operating expenses. Some are taking out new loans merely to pay the interest on their old ones. Unable to issue long-term bonds, they are forced to rely month after month on short-term borrowing from banks at 16⅓% or higher. Says Economist Allen Sinai of the Data Resources consulting firm: "The banks are keeping a number of big companies afloat. They are becoming captives to the corporations that are in financial trouble." Hundreds of small businesses, with no clout at the banks, are simply going bankrupt.

More loan demand comes from firms seeking cash to acquire other companies. Last year a record-breaking $73 billion was spent for big mergers and acquisitions. The pace of these deals has slowed a bit this year, but it is still going strong. ..

Construction companies are also heavy borrowers. Stuck with huge inventories of unsold houses and condominiums, they must take out ever larger loans to keep from going broke. At the same time, the governments of foreign countries like Brazil and Poland are asking for new credit on top of the billions they already owe U.S. banks. Most important of all, the U.S. Government borrows billions every month to finance its runaway deficits. All these loan demands taken together give a powerful boost to interest rates.

For every theoretical cause of high interest rates, there is a theoretical cure. Some of those proposals:

Lower Budget Deficits. Economists agree that Congress and the President must reach an accord to cut spending and raise taxes in 1983. Most analysts would like to see a deficit under $100 billion, instead of the $180 billion now projected. Says John Paulus of the Goldman, Sachs investment firm: "It's impossible to over estimate the aid and comfort that a budget compromise would give the financial markets." Even the hint of such a compromise last week sent , some short-term interest rates down slightly.

Easier Money. Though no one is advocating that the Federal Reserve flood the U.S. with money, many economists believe that Chairman Paul Volcker should be some what less rigid. "The Fed will have to ease up," says Edward Yardeni of the E.F. Hutton brokerage house. "Otherwise, we'll face the risk that this recession will turn into something uglier, a depression."