Where's Robert Rubin when you need him.....Treasury Secretary Still Sees No Recession
WASHINGTON (Reuters) - Treasury Secretary Paul O'Neill on Sunday said he still did not expect the U.S. economy to fall into recession, noting this year's aggressive Federal Reserve (news - web sites) interest rate cuts have not yet had their full impact.
The Fed has cut rates five times so far this year and its policymaking Federal Open Market Committee (news - web sites) was scheduled to meet on Tuesday and on Wednesday, amid financial market expectations that rates will be cut again.
O'Neill, asked on ABC's ``This Week'' whether he still believed the economy would avoid a recession, replied: ``Well, so far, I think that's where we are, yes.''
He said it was not unusual for a six-month lag from the time rates are cut to the impact on the economy. ``We're approaching that now, so I think things are unfolding in a way one would expect from history,'' O'Neill said.
``We're going through a process that's not unexpected. We have had an overexpansion in the investment sector, and there's some pullback, and the economy's feeling the effects of that right now,'' he said. ``But I think we're not doing badly for the kind of correction that we're in right now.''
O'Neill said while it was ``easy to find gloom and doom,'' consumers were ``hanging in there,'' and spending rates ``are still quite good.''
The contraction that occurred has been in the investment sector where there had been an overexpansion, O'Neill said. |
