Bush Optimistic About Economy; Fed Chairman Sees 'Difficulties'

U.S. President George Bush is urging lawmakers to act quickly on legislation to financially support mortgage lenders Fannie Mae and Freddie Mac, while expressing optimism that the country will weather the credit crisis.

The president spoke to reporters Tuesday in an attempt to assure the country, and investors, that the government's action would help stabilize the rocky financial markets.

Mr. Bush said although the country is going through a tough time, he believes it will emerge "stronger than ever before."

Federal Reserve Chairman Ben Bernanke told Congress Tuesday the fragile economy is facing “numerous difficulties” despite the Fed’s aggressive interest rate reductions and other fortifying steps.

At the same time, Bernanke, testifying before the Senate Banking Committee, sounded another warning that rising prices for energy and food are elevating inflation risks. This problem looms even as officials try to cope with persistent strains in financial markets, rising joblessness and housing problems.

The situation, he said, poses “significant challenges” for Fed policymakers as they try to chart the best course for keeping the economy growing, while making sure inflation doesn’t dangerously flare up. All the economy’s problems — including slumping home values, which threaten to make people feel less wealthy and less inclined to spend in the months ahead — represent “significant downside risks” to economic growth.