Paulson: US downturn is biggest focus, not inflation

Paulson: US downturn is biggest focus, not inflation

 

LONDON – THE downturn in the United States economy is a greater worry than inflation at the moment, Treasury Secretary Henry Paulson said yesterday.

In a radio interview with the BBC, Mr Paulson, on a visit to London, was asked whether his main focus was growth or prices.

 

‘Particularly in the US, our biggest concern is the downturn,’ he said.

 

‘There is no doubt that high headline inflation numbers as they relate to oil and food prices are a real concern to Americans. But core inflation is relatively contained, and my biggest focus today is the downside risk – housing, oil prices and obviously what is going on in the capital markets.’

 

The US central bank’s Federal Open Market Committee last week said it expects price gains to ‘moderate’ this year and next, cautioning that ‘uncertainty about the inflation outlook remains high’.

 

In the interview, Mr Paulson aligned himself with Federal Reserve chairman Ben Bernanke’s decisions, which include seven cuts since September that have sent the benchmark interest rate to 2 per cent.

 

‘I’ve been very supportive of what I’ve seen the Fed do and Mr Ben Bernanke do since I’ve been working with him, and I’m very supportive of his posture,’ Mr Paulson said, declining to say whether rates should be raised.

 

Mr Paulson, in London to discuss financial regulation with his British counterparts, said that rising energy and food prices are affecting developing nations such as China and India as well as the industrial world.

 

REUTERS, BLOOMBERG NEWS

 

Source: Straits Times

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