(Bloomberg) -- Former U.S. Treasury Secretary Timothy Geithner said there's no reason the decade-long U.S. expansion -- which he called a “modest recovery” -- can't continue absent “some dumb mistakes.”
Geithner spoke on CNN's “Fareed Zakaria GPS” on Sunday alongside former Fed Chairman Ben Bernanke and former Treasury Secretary Henry Paulson, three key participants in the rescue of the U.S. economy from the financial crisis of 2007-2008.
“This has been a very modest recovery. And it comes after a savage downturn, which made people very cautious,” said Geithner, who took the reigns at Treasury from Paulson in January 2009, after the election of President Barack Obama. “As long as people don't make some dumb mistakes, this expansion could go on.”
Geithner, now the president of Warburg Pincus LLC, said memories haven't receded of the consequences of the recession and financial market crisis, the worst since the Great Depression of the 1930s.
The U.S. economy grew at a faster-than-expected annualized pace of 3.2 percent in the first three months of 2019, the Commerce Department said on Friday. A big boost from inventories and trade offset a slowdown in consumer and business spending. Growth topped all forecasts in a Bloomberg survey that had called for 2.3 percent growth.
Bernanke said the U.S. economy is in a much more stable position now than a decade ago, and he trusts the Fed to “make the right choices” on policy. “They should do that without political interference,” he added.
The former Fed chief said there isn't much room to cut U.S. interest rates if the U.S. faces another recession, although other countries have even less room to maneuver on borrowing costs.
To contact the reporters on this story: Christopher Flavelle in Washington at cflavelle@bloomberg.net;Hailey Waller in New York at hwaller@bloomberg.net
To contact the editors responsible for this story: Ros Krasny at rkrasny1@bloomberg.net, Linus Chua
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