Cut deficits, don't ease money, IMF director says

Jacques de Larosiere, managing director of the International Monetary Fund, said countries facing high interest rates should reduce their large budget deficits, rather than loosen monetary policy, to bring the rates down. There have been increasing pressures from some members of Congress on the US Federal Reserve Board to increase the money supply to reduce interest rates and spur economic activity. But the IMF director argued that this would only ignite inflation, to the detriment of some progress that has been achieved on cutting prices.