Brady Doubts Deficit Concern Is Behind Dollar or Stock Decline
WASHINGTON — Treasury Secretary Nicholas F. Brady said today that he does not believe that concern over the U.S. deficit has caused the fall in the value of the dollar or the declines on stock markets since George Bush was elected President.
“Markets go up and down,” Brady said on NBC-TV’s “Today” show. “The currency markets, which are down in the last six weeks, are really at the same levels they were in January of last year. I don’t really worry about it very much.”
Asked if the declines indicate a lack of confidence in Bush’s ability to overcome the deficit, Brady said: “I just disagree. The Bush deficit-reduction plan, which is called a flexible freeze, will work.”
Major central banks intervened Thursday to arrest the latest slide in the value of the dollar, and the intervention in monetary markets continued today.
Brady said he sees no need for Bush to take action before his Jan. 20 inauguration to allay the concerns of financial and currency markets.
“I don’t think the concern is that big a problem,” he said.
Some foreign exchange traders were surprised by Brady’s remarks, and said they may have helped weaken the currency rather than strengthen it.
“It was strange for Brady to say he was unconcerned about the dollar when central banks have tried for two days to prop it up,” said one dealer.
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