Jerome Powell Warns of Looming Debt Crisis
Federal Reserve Chair Jerome Powell has issued a warning to the United States government, cautioning that the country’s path of relentless debt accumulation is unsustainable and poses a significant risk to the stability of the economy. In an interview with Scott Pelley on 60 Minutes, Powell emphasized the need for fiscal responsibility and urged the government to prioritize reducing the national debt.
Debt Burden Weighs on Future Generations
Powell expressed concern that the ballooning national debt is effectively borrowing from future generations. He stressed the importance of addressing the issue sooner rather than later, emphasizing that the next generation will likely bear the brunt of the consequences if corrective measures are not taken.
Record-High National Debt
According to the Treasury Department, the national debt currently stands at a record-high of $34.147 trillion, representing approximately 123% of the country’s GDP. Powell acknowledged that the US economy is currently in a solid position, with growth and inflation trending in a favorable direction. However, he emphasized the need for more data to confirm the right time to loosen monetary policies.
Cautious Approach to Interest Rate Cuts
Powell indicated that the Federal Reserve is carefully considering when to begin reducing interest rates. He highlighted the importance of seeing more evidence that inflation is moving sustainably down to the Fed’s target of 2%. The Fed Chair expressed rising confidence in this regard but emphasized the need for additional confirmation before taking the crucial step of cutting interest rates.
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