President Bush acknowledged Friday that the nation’s economy was going through troubled times, but cautioned against overreacting to current problems, saying such actions could cause longer-term problems.

Speaking at the Economic Club of New York, Mr. Bush said “in a free market economy there will be good times and bad times” and acknowledged “we’re going through a hard time.”

The president’s remarks came on a day when the Federal Reserve, the nation’s central bank, had to intervene to provide credit for the troubled Bear Stearns investment company. Mr. Bush praised the Fed’s chairman Ben S. Bernanke saying he was “doing a good job under tough circumstances.”

Mr. Bush said the economic stimulus package adopted recently by Congress, which includes incentives for investments by business and cash payments for households, would start taking effect by the second quarter of this year and have a greater impact in the third. “The challenge is not to do anything foolish in the meantime,” he said.