The Federal Reserve's new policy of reporting M2 and M3 on a weekly basis may mean the Fed is planning to drop M1 as a targeted monetary aggregate, sources here said.

An administration source and a congressional banking committee source both said the move to weekly reporting of the broader money supply measures may be setting the stage for dropping M1.Another view, expressed by a Wall Street economist, was that the change simply reflects Fed Chairman Alan Greenspan's preference to examine a great deal of data.

Last year the Fed told Congress it would de-emphasize M1 and establish a monitor range instead of a target range for M1, which consists of currency and deposits in checking accounts.

If the Fed does drop M1, it could make the announcement when Mr. Greenspan testifies at the House Banking Committee this week. His report to Congress, required by the Humphrey-Hawkins Act, will be the first indication of what the policy-setting Federal Open Market Committee decided at its meeting earlier this month.

A move to drop M1 may have been foreshadowed in the report of the December FOMC meeting. Those minutes said the issues involved with establishing a target for M1 will be carefully reappraised at the beginning of 1988.

The minutes expressed disappointment with M1 as a guide for monetary policy.

An administration source said dropping M1 is a good possibility, it really is.

He said M2 and M3 are less sensitive to changes in interest rates, and that if the Fed wanted to pursue a policy of interest-rate targeting, it would be less constrained by M2 or M3 targets than by an M1 target.

M2 consists of M1 plus bank overnight repurchase agreements, overnight Eurodollars, savings accounts, small time deposits and money market mutual

funds. M3 is even broader, consisting of M2 plus time deposits over $100,000 and term repurchase agreements.

One economist said the markets will be numbed by the barrage of money data, and weekly changes in M2 and M3 are expected to be volatile.