The Fed chairman warns, however, that “the long-term trajectory is not, and it will have to get back on track when the economy has regained its good health.”
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The current level of US debt remains sustainable, but the long-term path is not, and it will need to get back on track when the economy regains its health, according to the Federal Reserve Chairman ( Fed).
“Debt is growing significantly faster than the economy and it is by definition unsustainable”, on the other hand “the current level of debt is very sustainable,” said Wednesday Jerome Powell, in a virtual conversation hosted by the Washington Economic Club.
“This is not the main concern at the moment, but it is nevertheless an important concern that we will have to address again, I believe, when the economy is strong,” he said. highlighted.
The successive stimulus plans adopted to deal with the economic crisis caused by Covid-19, including the last of 1,900 billion dollars, dates from March, and the investment plan of more than 2,000 billion in infrastructure which to be negotiated in Congress in the coming months, raise concerns that the debt will swell too much.
This amounts to nearly 23,000 billion dollars. But very low interest rates reduced its cost by $ 41 billion in the first six months of the current fiscal year.
Jerome Powell also once again indicated that it was “very unlikely” that the Fed would raise interest rates before 2022, when inflation started to accelerate in March and this movement is expected to continue for several years. month.
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