The U.S. Treasury Secretary says recent turmoil in stock markets will probably take a toll on economic growth.
In an interview with a U.S. cable television network Tuesday Henry Paulson said the markets will calm down after a while as investors recalculate potential risks and rewards in stocks.
Paulson, who was a top Wall Street executive before taking over the U.S. Treasury, said the economy is fundamentally strong and will weather this crisis.
The current financial problems grew out of rising defaults of sub-prime mortgages, which forced some lenders out of business. The head of the U.S. Senate Banking Committee, Chris Dodd, says one million or more people could lose their homes as interest rates rise on their adjustable rate mortgages. Dodd urged the Federal Reserve to help struggling homeowners avoid default, and use all the tools available to ease the crisis overall financial crisis.
Dodd spoke after a meeting with Paulson and Federal Reserve Chairman Ben Bernanke Tuesday morning.
Some information for this report was provided by AFP, AP and Reuters.