Mon Feb 05, 2024 ▪ 3 min reading ▪ by Fenelon L.
In a recent interview with CBS NEWS, Fed Chairman Jerome Powell decries the U.S. fiscal trajectory as unsustainable, highlighting the risks of growing debt.
A rapidly growing debt that mortgages the future!
In an interview with CBS News on Sunday, Jerome Powell, Chairman of the US Federal Reserve (Fed), issued a warning about the unsustainable financial trajectory of public debt in the United States.
« The US federal government is heading down an unsustainable fiscal path. And that just means the debt is growing faster than the economy… We’re borrowing from future generations ” , does he have declared.
This debt spiral considerably reduces the country’s budgetary room for maneuver and jeopardizes the future of younger generations, regretted Mr. Powell. He calls for a rapid reversal of this trend before it reaches an uncontrollable point of no return.
No rate cut in March
Despite the constant decline in inflation over the past 11 months, the Fed is refraining for the moment from easing the course of its monetary policy. Mr. Jerome Powell wants to obtain more guarantees as to the sustainable nature of this disinflation, before lowering interest rates.
« We simply want more certainty that this disinflation trend is sustainable before starting the rate cut cycle. “, he indicated.
While he welcomes the progress made on the price front, Mr. Powell believes that great vigilance is required before beginning a cycle of monetary easing. Too early action could in fact stop this positive dynamic in its tracks, or even revive inflation. Conversely, waiting while taking the risk of an economic slowdown is not without danger either.
The Fed is thus seeking to find the right tempo, a subtle balance between supporting growth and controlling inflation. Given the still recent nature of this decline in prices, a rate cut from March therefore seems highly improbable, according to its president.
In short, future monetary decisions will depend on the evolution of the main macroeconomic indicators. And with growth and a job market still buoyant at this point, the Federal Reserve can afford to wait for the next data to adjust its strategy.
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Passionate about Bitcoin, I like to explore the intricacies of blockchain and cryptos and I share my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
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The comments and opinions expressed in this article are those of the author alone, and should not be considered investment advice. Do your own research before making any investment decisions.
2024-02-05 19:11:30
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