Fed Chairman Powell Is “Very Concerned” Of Rising Amount Of US Debt
Jerome Powell—The Fed (Federal Reserve) Chairman—is distressed due to the ballooning amount of the U.S. debt. At The Economic Club of Washington, D.C., Powell said, “I am very concerned about it. From the central bank of the U.S. standpoint, we are looking at a trade cycle length, which is our frame of reference. The non-sustainability of the U.S. federal administration and long-run fiscal is not really something that acts into the medium term that is significant for our policy decisions.”
He further added, however, “It is a long-run problem that we definitely need to deal with and eventually, will have no option but to face.” The Fed chief’s remarks came as the yearly US deficit reaches new sustained records above $1 Trillion, a truth many economists fear can spell trouble for upcoming generations. Annual deficits have reached highs of $1 Trillion before, but never in a time of sustained financial growth like now, the surging concern of what would happen if a recession arises. The total US debt is around $21.9 Trillion, of which $16 Trillion is indebted by the public. In part since continued rate augments under Powell, the interest rate on that debt can start to become a bigger burden. Wall Street’s respected financial prognosticator and “bond king,” Jeffrey Gundlach said in December that the economy seems to be declining “and perhaps the supply makes it so rates do not go lower with economic weakness.”
On a similar note, recently, the Fed was also in news as its Raphael Bostic—Atlanta Fed President—lately stated, that focusing on business executives’ anxiety regarding the economy and a worldwide declining financial wealth as factors that might hold the U.S. central bank back. Bostic said, “I am at one more move for 2019. Though the U.S. economic growth was nearer than expected in 2018 and prompted the Fed to lift rates four times, the business contacts seem less confident concerning in the upcoming months, while “clouds” have enlarged overseas.