FED'S JOHNSON URGES STRONGER ALLIED GROWTH
Federal Reserve Board Vice Chairman
Manuel Johnson said that the U.S.'s main industrial partners
should expand their domestic growth.
    In a speech to a women's group here, Johnson said, "There is
room for stronger domestic growth in those countries ... strong
enough to absorb growth in U.S. export markets."
    Johnson also said there was a better alignment of exchange
rates now and the Paris agreement to stabilize currencies has
brought western nations a long way towards establishing that
goal.
    Johnson said, "The Fed supports this pattern of exchange
rates ... and we'll see if it leads to a convergence in trade.
Quite possibly it can be achieved."
    Johnson said the Paris agreement achieved a better
alignment of exchange rates in exchange for stimulus by the
major surplus countries.
    He said this was "a major improvement and a step in the
right direction" and added U.S. allies look very strongly to a
U.S. budget deficit cut. "There will always be a potential risk
of breakdown in international cooperation" without a budget
deficit cut.
 Reuter
