IMF backs Fed on money policy.

IMF Backs Fed On Money Policy

BANGKOK, Thailand -- The Federal Reserve is following the right policy in seeking to curb U.S. money growht because America's underlying rate of inflation is high enough to warrant attention, the International Monetary Fund said.

While the slack U.S. economy has enhanced short-term prospects for lower inflation, "the recent rise of long-term interest rates could signal that inflation expectations remain entrenched," the fund said in its World Economic Outlook.

The IMF and World Bank are holding their annual meetings in the Thai capital.

The Fed's policy of reducing growth rates of the monetary aggregates appears to be an appropriate medium-term stategy, the fund said.

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