Paulson says US economy enduring ‘rough period’

AFP
Wednesday, July 2, 2008

US Treasury Secretary Henry Paulson said Wednesday that the US economy was enduring “a rough period” and warned that home foreclosures would likely remain high in the near future.

The US Treasury chief said soaring crude oil prices, a widespread credit crunch and a two-year long housing market slump had taken some of the wind out of the sails of the US economy.

“The US economy is going through a rough period. US foreclosures will remain elevated and we should not be surprised at continued reports of falling home prices,” Paulson warned during a speech in London.

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Paulson’s remarks were also released by the Treasury in Washington. The Treasury chief and former banker stopped off in London Wednesday amid a whistle-stop tour of European capitals.

He said the giant economic stimulus, stuffed with tax rebates, backed by the administration of US President George W. Bush had helped shore up US growth, but that the housing downturn poses a “significant” downside risk to economic momentum.

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