Paulson sees end of credit crunch
US Treasury Secretary Henry Paulson has said that the worst of the credit crunch may have passed. He said the financial market turmoil that has led to massive losses at Wall Street banks had eased.
However, he acknowledged that the US economy was still facing tough times as people coped with soaring petrol prices and a weak job market.
He said rising energy prices could limit the effect of a $168bn (£86bn) package to stimulate the economy through tax rebates.
"Obviously, the high price of gasoline is unwelcome and is a challenge and is a headwind," he said.
Oil prices have hit a record level of $123 a barrel and this has been reflected in pump prices.
Many economists expect the US to fall into a recession this year as a housing slump and market turmoil take their toll on the wider economy.
But Mr Paulson said he expected the economy to improve this year as the tax rebates get businesses and consumers spending again. However, he said that credit markets were still not functioning in a normal manner.
"I wouldn't be surprised at all to see more bumps in the road," he said.
