Paulson: More economic bumps lie ahead

Secretary of the Treasury Henry Paulson has told investors to expect “additional bumps in the road” as the U.S. economy recovers from the credit crisis. In remarks delivered this morning at the New York Public Library, he offered a cautious outlook for the coming weeks and months, saying: “Until the housing market stabilizes further, we should expect some continued stresses in our financial markets.” Citing the necessary role that Fannie Mae of Washington and Freddie Mac of McLean, Va., play in the U.S. economy, Mr. Paulson said: “Fannie and Freddie's stability is critical to financial-market stability.” He also praised the role of the Federal Deposit Insurance Corp. of Washington in the wake of the failure of IndyMac Bancorp Inc. of Pasadena, Calif., saying that the system “helped prevent one failure from destabilizing broader financial markets.” “Progress has not come in a straight line” Mr. Paulson said. “We need to remain patient as we work through these challenges.” Mr. Paulson added that he thinks “that the United States is on the right path to resolving market disruptions and building a stronger financial system.”