“Upward pressure” on rates:Swan

“There is no doubt that events in the United States will put upward pressure on interest rates,” the Treasurer, Wayne Swan, said today.

“But we will just have to wait and see,” he added.

Mr Swan took care to note that he was not talking about the decision the Reserve bank is expected to take on rates, on next Tuesday.

He was speaking on ABC radio, about events associated with the collapse of share prices on Wall Street last night.

“I am certainly disappointed,” Mr Swan said, when asked for his reaction to the Republican revolt, which saw the US Congress reject President George W Bush’s call for support of a $US700 billion bail out, proposed by the US Treasury secretary, Henry Paulson.

That rejection, on a 228-205 vote, came overnight, Australian time.

“What we have to deal with now is the practical reality of that decision,” Mr Swan said.

He also spoke, once again, of the “strength” of the Australian economy.

“The Australian system is in good shape, very good shape,” Mr Swan said.

“If there is one country you would want to be in in these circumstances, it is Australia,” the Treasurer added.

But he admitted that events overseas would put “upward pressure on costs.”

Related stories:

1. Bush presses plan to bolster US mortgage giants
2. Wall Street’s small gain
3. “Cash for trash” : Paulson plan attacked