Federal Reserve Chair Jerome Powell has highlighted concerns about the United States’ fiscal trajectory, describing it as unsustainable and emphasizing the urgency of addressing this issue promptly.
Speaking at the ECB Forum on Central Banking in Sintra, Portugal, Powell underscored that the US is currently grappling with a significant deficit that demands attention sooner rather than later. While refraining from commenting on specific governmental policies due to the non-political nature of the Federal Reserve, Powell stressed the critical need for the country to return to a sustainable financial footing.
“In essence, our role isn’t to dictate fiscal policy, as that responsibility rests with elected officials,” Powell remarked. “However, it’s evident that the US faces a substantial deficit during a period of full employment, and although the current level of debt is manageable, the trajectory is worrisome.”
Highlighting the non-controversial nature of his observation, Powell expressed his belief that addressing this issue should be a top priority. “Many elected officials recognize this imperative,” he added. “Moving forward, our focus should be on charting a course back to fiscal sustainability. Persisting with large deficits during prosperous economic periods is unsustainable in the long run.”
As of the latest figures, the US government reports a $1.2 trillion deficit alongside a total debt of $34.8 trillion.
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