US Treasury Secretary Henry Paulson said on Tuesday he believes the US economy will manage to grow slowly in the near term and capital markets will recover from a difficult period of stress as they reassess and reprice risk.
"The US economy is diverse and resilient, and our long-term fundamentals are healthy. I believe our economy will continue to grow, although at a slower pace than we have seen in recent years," Paulson said in prepared testimony to the US Senate Finance Committee.
Paulson said helping capital markets work through their current stress was the Treasury's "first concern." It is monitoring capital markets closely and advocating strong market discipline and robust risk management.
"While we are in a difficult transition period as markets reassess and reprice risk, I have great confidence in our markets. They have recovered from similar stressful periods in the past, and they will again," Paulson added.