Volcker sees the makings of an interest-rate drop

Federal Reserve Board chairman Paul Volcker says he thinks the next major more in interest rates will be down -- but he declines to predict when. In a public-TV interview, he said the US inflation rate has shown signs of slowing, as has the economy, leading him to expect upward pressure on interest rates to ease.

Mr. Volcker said the way to get interest rates lower is to continue policies that reduce inflation -- President Reagan's program of restraint in government spending and the Federal Reserve's policy of restraint in the growth of money and credit, which the Fed will continue.