Housing market hasn’t hit bottom, Paulson says

NEW DELHI – “We haven’t hit the bottom yet in housing,” U.S. Treasury Secretary Henry Paulson told a conference today in India, although he still believes “there is enough strength in the economy that we can grow through this,” Bloomberg News reported.
Also in New Delhi was Lloyd Blankfein, who succeeded Paulson as head of investment bank Goldman Sachs Group Inc. “Housing is one of the U.S.’s great institutions, so when the pendulum swings, don’t kill home ownership,” Blankfein said. “My concern is the backlash to subprime.”
Federal officials studying the subprime lending collapse are focusing on the role of investment rules and credit-rating companies, Paulson said. “We need to shed light on it and make the policy adjustments so this doesn’t happen again.” He also addressed yesterday’s record low against the euro, saying: “I am strongly committed to a strong dollar.”
Their comments came as the policymaking Federal Open Market Committee was gathering for a two-day meeting in Washington, D.C., that is widely expected to end with a rate-cut announcement tomorrow afternoon. “The Fed wants to give a lower rate” to the many people now seeking to refinance mortgages that have become too expensive, Kazuaki Oh’e, a debt salesman at CIBC World Markets in Tokyo, told Bloomberg News.
Additional information about the Federal Reserve System and the Federal Open Market Committee is available at www.federalreserve.gov.