Central banks and governments try to control inflation through reducing liquidity and fiscal consolidation respectively. Liquidity reduction can be done through hiking interest rates, increasing reserve ratios requirements and open market operations involving buying of securities by central banks.  Fiscal consolidation is the process of reducing the fiscal deficit. Since fiscal deficit is increased for providing a boost to the economy, consolidation is the act of pumping out the excess steam out of the economy so it doesn’t overheat. Consolidation is also done to reduce the burden of interest payments.