U.S. Treasury Secretary Paulson Says Fundamentals of Economy Favourable
Despite five months of job losses and soaring oil prices, the fundamentals of the U.S. economy remain favourable, said U.S. Treasury Secretary Henry Paulson on Monday. However, he noted the price of oil is a problem and that no policy initiatives are off the table, including currency intervention.
Paulson was interviewed on CNBC as well as CNN on a variety of issues.
He attributed the surge in oil prices to increasing demand from the global market and a lack of supply growth, adding that the U.S. is working on a 10-year energy framework with China. He also said the call from Saudi Arabia for an oil meeting is a productive idea.
"We're going through a tough period, no doubt about it," Paulson said. Yet he noted the long-term fundamentals of the U.S. economy are favourable when compared to other countries, and that the fiscal stimulus package is creating jobs that would otherwise be lost.
CNBC also hosted Dallas Federal Reserve President Richard Fisher, who said monetary policy needs to be tighter.
Known to be an inflation hawk, Fisher called inflation "the ultimate enemy of capitalism," and agreed with Secretary Paulson that government intervention to revalue the currency is "not off the table."
Fisher said it's important for the U.S. dollar to retain its credibility through price stability.
By Patrick McGee and edited by Nancy Girgis