New IMF Head: US Needs Debt Deal 'Immediately'

Newly crowned IMF queen Christine Lagarde called for “bold fiscal action” to end the US debt ceiling crisis today, though she warned that drastic spending cuts could lead to a jobless recovery. “I’m hopeful that the political courage shown by European leaders will soon be followed” by the US, she declared in speech before the Council on Foreign Relations, according to Politico. “The clock is ticking, and clearly the issue needs to be resolved immediately.”

The stakes are high, Lagarde warned, because “an adverse fiscal shock in the United States could have serious spillovers on the rest of the world.” At the same time, she warned against “unduly hasty” spending cuts that could hurt the US economy, the BBC reports. She also urged European leaders to move full speed ahead with their plans to alleviate the debt crisis sweeping through Greece, Ireland, and Portugal, warning that otherwise “turbulence could easily re-surface on the financial markets.” (More IMF stories.)