US President George W. Bush said on Monday he expects the economy to ride out a financial storm that is roiling markets, with the help of his administration and the Federal Reserve.
A day before the Fed was widely expected to unleash another interest rate cut to bolster stalling economic growth, Bush attempted to reassure investors that the government was maintaining a bulwark against a market meltdown.
"The Federal Reserve has moved quickly to bring order to the financial markets," Bush said in a statement after huddling with his top economic advisors, including Treasury Secretary Henry Paulson and chief economic aide Edward Lazear.
"We're in challenging times," Bush said, voicing support for the Fed's emergency moves to add liquidity and stability to the financial system.
Bush's remarks came after a series of extraordinary actions by the Fed to unlock a frozen credit system and rescue troubled investment bank Bear Stearns as it teetered on bankruptcy.
"Secretary Paulson ... is supportive of that action, as am I," Bush said.
Praising the Treasury chief, a former chief executive at Wall Street investment giant Goldman Sachs, Bush said: "You've shown the country and the world that the United States is on top of the situation."
Paulson, meanwhile, defended the government's decision to provide a US$30 billion line of credit to prevent Bear Stearns from going bankrupt, while he declined to speculate on possible intervention in the currency markets to prop up the dollar.
"Bear Stearns had a liquidity crisis. And so we felt it was very important that this be resolved as a way to minimize impact on our economy," Paulson said. "This was an easy decision."
He repeated his consistent statements that the US has a "strong-dollar policy."
"It's very much in our nation's interest. Our economy has ups and downs. The long-term fundamentals, and I'm very confident about this ... we have strong long-term fundamentals. That will be reflected in our currency markets," he said.
Meanwhile, more than three in four Americans think the US is in a recession according to a USA Today/Gallup Poll released yesterday.
Not since September 1992, two months before former president George Bush lost his re-election bid, have so many Americans said the economy was in such bad shape, USA Today reported.
Seventy-six percent of those polled said the economy is in recession, compared to 22 percent who said it is not, USA Today said. Asked if the US could slip into a depression lasting several years, 59 percent said it was likely and 79 percent said they were worried about it, the paper said.
The poll of 1,025 adults was completed on Sunday and has a margin of error of plus or minus 3 percentage points.
The poll results reflect a slide in confidence that economists say could make the US economy worse, the article said.
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