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Bush reassures over economic woes Bush reassures over economic woes
(about 10 hours later)
President George Bush has attempted to restore confidence in the US economy, amid the deepening financial crisis.President George Bush has attempted to restore confidence in the US economy, amid the deepening financial crisis.
Speaking at the Economic Club of New York the President acknowledged that growth had slowed but said that the economy is basically sound.Speaking at the Economic Club of New York the President acknowledged that growth had slowed but said that the economy is basically sound.
He said the economy was "obviously going through a tough time." He said the economy was "obviously going through a tough time".
Meanwhile, Ben Bernanke, the head of the US central bank pledged to do everything possible to help struggling home owners hit by the credit crisis. Meanwhile, Ben Bernanke, the head of the US central bank pledged to do everything possible to help struggling homeowners hit by the credit crisis.
He said that the Fed "is strongly committed to fully employing our authority, expertsie, and resources to help alleviate their distress." He said that the Fed "is strongly committed to fully employing our authority, expertise, and resources to help alleviate their distress".
The Fed has already cut interest rates sharply to ease teh credit crunch, and is expected to make a further reduction when it meets next week. The Fed has already cut interest rates sharply to ease the credit crunch, and is expected to make a further reduction when it meets next week.
Housing problemsHousing problems
The US housing market is in freefall, with prices dropping and repossessions rising.The US housing market is in freefall, with prices dropping and repossessions rising.
The remarks came shortly after one of Wall Street's leading investment banks, Bear Stearns, said it needed emergency funding due to the credit crisis.The remarks came shortly after one of Wall Street's leading investment banks, Bear Stearns, said it needed emergency funding due to the credit crisis.
The President said that the Bear Stearns situation was changing fast, but the US Federal Reserve and the US Treasury had the situation in hand. The president said that the Bear Stearns situation was changing fast, but the US Federal Reserve and the US Treasury had the situation in hand.
He also admitted that the credit crisis is having a knock-on effect to the broader economy by making banks less able to lend money.He also admitted that the credit crisis is having a knock-on effect to the broader economy by making banks less able to lend money.
"Hard working Americans are concerned about their families and their bills, " the President said. "Hard-working Americans are concerned about their families and their bills," the president said.
Consumer confidence slipsConsumer confidence slips
That was supported by the latest report on US consumer confidence from the University of Michigan.That was supported by the latest report on US consumer confidence from the University of Michigan.
Its index of confidence slipped in early March compared to February to near record lows.Its index of confidence slipped in early March compared to February to near record lows.
"There was nearly unanimous agreement among consumers that the economy was now in recession," said Richard Curtin, director of the survey."There was nearly unanimous agreement among consumers that the economy was now in recession," said Richard Curtin, director of the survey.
President Bush said that tax rebates agreed with Congress would start taking effect later this year, which should help boost the economy.President Bush said that tax rebates agreed with Congress would start taking effect later this year, which should help boost the economy.
A survey of economists by Reuters also suggested that a majority are now predicting that the US economy had moved into recession.A survey of economists by Reuters also suggested that a majority are now predicting that the US economy had moved into recession.