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Geithner says Iran’s ‘saber-rattling’ is behind spike in gas prices

Zachary Roth
The Ticket

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Treasury Secretary Timothy Geithner (Carolyn Kaster/AP)

Iran's "saber-rattling" is helping to drive up prices at the gas pump, according to Treasury Secretary Tim Geithner.

"Iran's doing some saber rattling, and that's causing a little uncertainty," Geithner told CNBC's Steve Leisman Friday. He added that economic growth in the United States and other countries is also having an impact on global oil prices, by increasing confidence.

Geithner also warned that Iran's pursuit of a nuclear weapon could have major global economic consequences.

"If Iran is successful in its nuclear ambitions, the world and oil markets and the global economy and the stability in the region would be in jeopardy," he said.

Gas prices have risen to around $4 a gallon of late, as tensions over Iran's nuclear program have flared.

In a wide-ranging interview, Geithner also said that it's "less likely" today than before that Europe's economic woes will derail the U.S. recovery.

"Europe has made a lot of progress in trying to convince investors around the world and in Europe that they are going to do what's necessary to reduce the risk of a catastrophic financial failure in Europe," he said. Eurozone leaders agreed this week on a second bailout for Greece.

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Geithner, who has said he plans to step down at the end of the year, was noncommittal when asked whether he expected that the administration's corporate tax reform proposal would be enacted any time soon.

"We think there's a good chance that by starting to lay the foundation for reform now, working with Democrats and Republicans, we can improve the odds that reform comes sooner than otherwise would and on terms that are better for the economy long-term," he said.

And he urged lawmakers to act on an administration plan to provide relief to homeowners underwater on their mortgages.

"If Congress doesn't act, then it'll take longer for the housing market to heal and longer for people to repair the damage caused by the crisis," he said.

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