US Secretary of the Treasury Jack Lew said the US is growing in a strong way, and that there is “a lot to feel good about” how the economy is progressing, days after the US Federal Reserve raised interest rates for the first time in almost a decade.
While the country needs to ensure that the results of that growth are more broadly shared so that workers feel the benefits, the economy is doing well, Lew said in an interview with CNN’s Fareed Zakaria GPS that was scheduled to air yesterday.
“Frankly, the US economy is doing quite well. We have a lot of international headwinds, and notwithstanding that, we’re staying in a very good place,” said Lew, according to a transcript provided by the network. “We’re seeing strong consumer demand, record levels of auto sales, and improvements in the housing market.”
Citing traditional independence between the central bank and the executive branch, Lew declined to comment on the decision by the Fed on Wednesday to raise the target for the federal funds rate by 0.25 percentage points.
On the same broadcast, UK Chancellor of the Exchequer George Osborne praised the Fed for handling the rate move “very professionally.”
“I think it was well signaled,” Osborne said. “It did not cause a great deal of turbulence or trauma in the market. And it is quite a significant moment after so many years of rates at the floor to be starting to raise them.”
Osborne said he was “a great admirer” of what US President Barack Obama’s administration has done to boost the country’s economy since the recession of 2008-2009.
The US and UK are “shouldering the burden of a lot of the world’s growth” since the eurozone “sadly remains weak, although a little stronger than it was,” and some emerging economies face big challenges, Osborne said.
Lew also said the US is making progress in limiting the ways Islamic State group uses to finance itself, by cutting oil sales and shutting off the terrorist group from the formal banking system.
Bombing raids have destroyed 400 tanker trucks in the last month and a half and are now going after infrastructure around oil refineries controlled by Islamic State, Lew said.
Finance ministers of the countries on the UN Security Council passed a US-Russian resolution on Thursday aimed at dismantling the financial network of Islamic State group and choking off its access to money from oil and looting. A UN report estimated that Islamic State was earning as much as US$1.7 million a day from crude oil sales.
That resolution is “a very, very powerful message to anyone thinking of getting involved in this business or any financial institution thinking of supporting it — you know, that is going to be something we don’t want to do,” Osborne said in the CNN interview.
While the US and its allies have already shut off Islamic State from the formal banking sector, the world needs to work together to make sure all sanctions and restrictions are followed, Lew said.
“What we need to do now is be effective — and only the world community together can do that,” he said. “It’s all about execution. We’ve now got to work individually and collectively to make sure that the promises made in the resolution are kept.”
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