Exchange With Reporters in Cleveland

Stock Market

Q. Mr. President, does this roller coaster stock market have you worried, sir?

The President. No. I mean, people have been predicting for months that there would be some

sort of correction in the stock market, that it got too high, too quick. And I think when the Federal Reserve decided to raise the interest rates a little bit short-term, that happened. When people take their money out of the stock market, if they put their money in Government securities, that would raise interest rates, longterm interest rates in those securities. On the other hand, there's no inflation in the economy. We had 458,000 new jobs last month. That's the most in over 6 years. So that could have something to do, too, with a little increase in the interest rates.

Fundamentally, I still would just point people to the fact that we're creating jobs at a very rapid pace and without inflation, which means there's good growth. And I think the most important thing is that—we listened to the experts. The experts are telling us that there's some institutional investors and when they move around, that could aggravate trends both up and down in the stock market. But fundamentally it's a solid stock market and a very solid economy. And I think that's what should guide people in their long-term investment decisions. We have a solid economy, growth on the horizon. And none of us should do anything which would derail that. We should keep steadily moving forward.

Q. But can the market talk the economy into a slowdown?

The President. Well, I don't think so. No one expects that we can continue to grow at 7 percent a year. That's what we had in the last quarter of last year. That was the most we had in a decade. And you can't sustain that. But I think we can sustain very good and steady growth, and that's my goal. My goal is to have a steadily growing economy, where we're creating jobs and we're doing it in a way that doesn't run the risk of a big spurt and then going back into a deep recession. So that's why I'm hoping that no one will overreact to this. After all, if we have no inflation and we have job growth, those are the two most important things to ordinary Americans: no inflation and job growth.

So we'll get through this if everybody will just remain calm and let the market work itself out.

Q. Is this a situation where good news is bad news?

The President. No—well, it's a situation where good news can maybe reinforce some of the things which are going already. If you have real good news, you know you're going to have interest rates go up a little bit because the economy's very robust. But these other things are happening. I think we'll work through it, and I think it'll be just fine. We're just going to have to ride through it a little bit. But I think it's going to be fine.

NCAA Basketball Championship

Q. Are you worried about tonight's game?

The President. Of course. [Laughter] Of course. I mean, it'll be a great game. And you have to respect the fact that Duke has been there 3 of the last 4 years—extraordinary talent, more seasoned, more experience in the players, a fabulous coach, good program, playing at home with lots of folks from Carolina. It's a——

Q. You're low-balling—sounds like you're lowballing here. [Laughter]

The President. You guys taught me I had to do that. [Laughter] I learned it, it's one of the many lessons I've learned from you.

Q. [Inaudible]—that's a political hedge.

The President. No, it's a real hedge. I expect a very, very vigorous and an extremely close game.

Q. You're going to have to switch ties. [Laughter]