Fed Chairman Jerome Powell says US is on ‘unsustainable path’ amid massive deficits and calls for solution sooner rather than later

Fed Chairman Jerome Powell says the US is on an unsustainable fiscal path and this should be a “top-level issue.”

In a new discussion at the ECB Forum on Central Banking in Sintra, Portugal, Powell says the US has a “very large” deficit that needs to be addressed – ideally sooner rather than later.

While he would not comment on the specific policies of any administration, Powell said the U.S. must return to a sustainable financial footing.

“I’m going to give you the traditional answer to some extent. That’s what we just don’t do: fiscal policy is a job for elected people. We are not elected people, so we don’t comment on it, especially in the run-up to the presidential election. We do not comment on anyone’s specific policies in any way.

However, I would say more broadly that the United States is running a very large deficit at a time when we are at full employment and debt levels are not unsustainable. [but] the path we are on is unsustainable.

That’s completely non-controversial.

I would have thought that this is something that should be a top-level issue, and you hear this from a lot of elected officials, but it should be a real focus going forward, ‘how do we get back on a sustainable path? ?’, because in good economic times you cannot sustain these kinds of shortages for long. I mean, I can’t really speak to time, but in the long run, sooner or later we’re going to have to do something, and sooner or later it’s going to be better than later.

At the time of publication, the US government has a deficit of $1.2 trillion and a debt burden of $34.8 trillion.

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