Powell: Rising debt puts U.S. on 'unsustainable fiscal path'

Author: Tom Mitchelhill, Cointelegraph; Compiler: Deng Tong, Golden Finance

Federal Reserve Chairman Jerome Powell warned that the United States is embarking on an "unsustainable path" fiscal path,” with debt growth currently outpacing overall economic growth.

In an interview with "60 Minutes" on January 4, Powell said it was "time" for U.S. elected officials to start a "mature discussion" about reducing debt levels in the economy.

Powell said: "In the long term, the U.S. federal government is embarking on an unsustainable fiscal path. This means that the debt is growing faster than the economy."

Bit Bitcoin (BTC) prices were volatile over the weekend when the Federal Reserve kept interest rates at 5.25% to 5.50% and the central bank dismissed hopes of any rate cuts in March, saying "greater confidence" was needed before doing so. to deal with inflationary pressures.

Powell reiterated this point in the interview, sayingthe Fed is still waiting for "good" evidence of the strength of the economy before considering a rate cut.

"It's probably unlikely that this committee will reach that level of confidence at its March meeting in seven weeks," Powell said, adding that "almost all" of the Fed's Members agreed that a rate cut would occur at some point this year.

“We just want a little more confidence before we take the very important step of starting to cut rates.”

Rate cuts are seen as having a negative impact on risky assets like cryptocurrencies As well as growth technology companies such as Apple, Nvidia and other large technology stocks.

When the Fed cuts interest rates, borrowing costs fall, which typically increases spending activity and risk appetite in the overall economy.

Powell said he believes inflation will continue to decline in the first half of this year and that the central bank will revisit its strategy at its next Federal Open Market Committee meeting in March.

He added: "If we see labor market softening, or inflation does fall convincingly, then we will want to act as quickly as possible."