Reuters Daily Investor Update

UPDATE 2-Paulson confident on U.S. economy, quiet on markets

Tue Mar 6, 2007 9:44PM EST
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SEOUL, March 7 (Reuters) - U.S. Treasury Secretary Henry Paulson on Wednesday predicted stable growth for the U.S. economy but he made no remarks on the yen or financial markets which are jittery after more than a week of turmoil.

South Korea's finance ministry said in a statement that Paulson also said he shared the view of South Korea's finance minister, Kwon O-kyu, that the fundamentals of the world economy were strong and it would maintain growth, despite fluctuations in global equity and foreign exchange markets.

"Secretary Paulson assessed that the U.S. economy was successfully entering into a stable growth path, despite a slump in the U.S. real estate market," the ministry said in the Korean-language statement.

Paulson, in South Korea as part of a trip to three Asian countries, earlier told reporters he was "very comfortable" with the global economy.

Global equity markets have been roiled since early last week by several factors, including a sharp drop in Chinese stock prices, concern about a U.S. recession following remarks by former Federal Reserve Chairman Alan Greenspan and a weak U.S housing sector.

In Tokyo on Tuesday, Paulson declined to comment when asked whether an unwinding of yen carry trades -- trades funded by borrowing the cheap Japanese currency -- was a concern.

Paulson will have a brief meeting with South Korean President Roh Moo-hyun but has no news conference scheduled before leaving later in the day for China.