Paulson Praises Fed Cut, Says Stimulus Plan Needed
By John Brinsley and Brendan MurrayJan. 22 (Bloomberg) — Treasury Secretary Henry Paulson said the Federal Reserve’s emergency interest-rate cut may boost investor confidence and called on Congress to “quickly enact” legislation to buttress U.S. growth.
As Paulson delivered a speech in Washington on the health of the U.S. economy, the Fed lowered its benchmark interest rate to 3.5 percent from 4.25 percent before a scheduled meeting on Jan. 29-30 to head off the threat of recession as global stock markets tumbled.
“What I think it shows to this country and the rest of the world is that our central bank is nimble and is able to move quickly to respond to market conditions,” Paulson said, when asked after the speech about the Fed’s decision. “That should be a confidence builder.”
Paulson’s speech to the U.S. Chamber of Commerce had been scheduled since Jan. 18. His remarks came after a two-day plunge in European and Asian stock markets fueled by mounting concerns the U.S. is headed into a recession. President George W. Bush put the Treasury chief in charge of negotiating a stimulus package with the Democratic-majority Congress.
“We need to do something now, because the short-term risks are clearly to the downside,” Paulson said in the speech. “The legislation must be enacted quickly, and the elements of the legislation must have immediate impact. If we miss this, we miss the mark.”
`More Action’ Needed
