Bush: Markets can remain resilient
President said there is enough liquidity to allow markets to correct, nixed idea of homeowner bailout.
NEW YORK (CNNMoney.com) -- President Bush said Thursday he believed that financial markets, which have been rattled recently by mortgage and credit market woes, should remain resilient.
"The fundamentals of our economy are strong," he said, during a question-and-answer session with reporters at the White House. "And I'm told there is enough liquidity in the system to enable markets to correct."
The stock market, which has been been on a wild ride in recent weeks amid troubling news from the mortgage and larger credit markets, moved off its lows following Bush's remarks.
Bush nixed the idea of a direct bailout of homeowners affected by recent troubles in the mortgage market.
But the president, believing that the battered housing market was due for a soft landing, said he was in favor of providing more flexibility to institutions such as the Federal Housing Administration to help homeowners refinance their loans.
Bush also said that he did not believe mortgage lenders Freddie Mac (down $0.56 to $62.08, Charts, Fortune 500) and Fannie Mae (down $0.22 to $66.53, Charts) should not be allowed to step in to help revive the mortgage market until Congress takes steps to reform the two institutions.
The president said he was not planning to cut corporate taxes, but that it was an issue that was being discussed by the Treasury Department.
"If the conclusion is that our tax structure makes it harder for businesses to compete, therefore making it harder for people to find work over time, then we need to address the competitive imbalance in our tax code," he said.
Bush also weighed in against a recent House proposal to raise gasoline taxes to pay for bridges in need of repairs, stating that Congressional spending should be revisited first.
"My suggestion would be that they revisit the process by which they spend gasoline money in the first place," said Bush. "And, if bridges are a priority, let's make sure we set that priority first and foremost, before we raise taxes."