International market turmoil will hit US growth but not push it into recession, US Treasury Secretary Henry Paulson said in an interview published yesterday.
Global share falls sparked by fears over the US mortgage market "will extract a penalty on the growth rate" of the US economy, Paulson told the Wall Street Journal.
However, he added that "the economy and the markets are strong enough to absorb the losses" without provoking a US recession.
Paulson said that the troubles had hit international markets "against a backdrop of a very healthy global economy with strong fundamentals."
"Looking over periods of stress that I've seen, this is the strongest global economy we've had," he said.
He said some "entities will cease to exist" because of the troubles and that the market "adjustment" would go on but the US economy would keep growing.
Paulson said the US administration had little ability to influence the troubles outside the action it has already taken -- through Federal Reserve cash injections.
"There is nothing, in my judgment, that we should be doing in terms of guaranteeing market participants against losses or in terms of restraining risk taking," he said.