The public debt of the United States is “unsustainable” in the long term and it is “high time” to remedy it, said Sunday the president of the American central bank Jerome Powell, in a long interview on the CBS channel.
“In the long term, the United States finds itself on an unsustainable fiscal path. The American federal government is on an unsustainable fiscal path,” insisted Mr. Powell, supporting his remarks by noting “that the debt is growing faster than the economy.”
“I think we are starting to hear from (elected officials) who can ensure” that the United States returns to a “sustainable” debt position and “that the sooner the better”.
“It’s time we put this in our sights again,” he added. “We can say that it is urgent,” he pleaded.
Regarding the United States’ place in the world, Mr. Powell considered its interaction with other nations to be “extremely beneficial to our country.”
“Since World War II, the United States has been an indispensable nation in aiding and defending democracy, security agreements, economic agreements. (…) It is clear that the world wants this,” he noted. “It benefits our economy so much to have this role.”
At this week’s meeting of its Monetary Policy Committee (FOMC), the Fed maintained its rates and indicated that it was waiting to have greater confidence in the lasting decline in inflation before initiating monetary easing.
A position reiterated on CBS, with Mr. Powell again considering it unlikely that a reduction will be decided at the next meeting in March.
“It doesn’t have to be better than what we’ve seen, or even as good. It simply has to be good,” he said of the necessary conditions, weighing “the risk of moving too early against the risk of moving too late.”
“The moment is approaching (…), based on our forecasts,” he wanted to reassure.
According to him, the inflation rate should continue to decline in the first half of the year and the Fed should once again position itself on the rate level target at the March meeting. It was 4.6% at the end of its December meeting.
“The economy is strong. The job market is strong. Inflation is falling. There is no reason why this cannot continue,” he noted. “I really think the economy is in a good place.”
