WASHINGTON (AFP) - US Treasury Secretary Henry Paulson said Tuesday he has been conferring with his foreign counterparts on measures to restore calm to roiling global stock markets.
Speaking at the US Chamber of Commerce following sharp falls on Asian and European stock markets Monday which were largely tied to fears about a potential US recession, Paulson stressed the Treasury was keeping a close eye on market developments.
"I and my team have been actively engaged with policymakers here and around the world as we closely monitor the global equity correction," Paulson said.
The Treasury chief spoke as the Federal Reserve announced it had slashed its base US interest rate by an unprecedented three quarters of a percentage point to 3.50 percent amid mounting recession fears.
The Dow Jones Industrial Average was down just over one percent, or 131.12 points, at 11,968.18 at 1708 GMT as fears about US economic momentum unsettled Wall Street which had been closed Monday due to a public holiday.
"I continue to have confidence in the underlying strength of the global economy," Paulson said.
He said that while the US economy is resilient, it had become clear that growth was moderating amid a widespread housing downturn.
Treasury officials said Paulson would not be travelling as planned this week to the World Economic Forum in Davos, Switzerland, but would continue working on an economic stimulus plan outlined by President George W. Bush on Friday.
"Secretary Paulson made the decision to stay back and work with Congress when president Bush asked him to work on the stimulus package," a Treasury official said.
The plan, aimed at averting a recession, is worth at least 140 billion dollars, but the White House said Monday it would be open to a larger package which is expected to include tax rebates among other measures.
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