Sun. Mar 3rd, 2024

ÉUnited States&nbsp ;: the public debt is “unsustainable”, according to Powell

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The Chairman of the Fed, Jerome Powell.

Agence France-Presse

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 (Fed) Jerome Powell, in a long interview on CBS.

In the long term, the United States finds itself on an unsustainable fiscal path. The US federal government is on an unsustainable fiscal path, Powell insisted, backing up his remarks by noting that the debt is growing faster than the economy.

I think we're starting to hear from [elected officials] who can get the United States back into a sustainable debt position and the sooner the better.

It's time we got this in our sights again. We can say that it is urgent.

A quote from Jerome Powell, Chairman of the US Central Bank

Regarding the place of the United States in the world, Mr. Powell considered that their interaction with other nations was extremely beneficial to our country.

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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. It benefits our economy so much to have this role.

A quote from Jerome Powell, chairman of the US central bank

When 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 starting a monetary easing.

A position reiterated on CBS, Mr. Powell again considering it unlikely that a reduction would be decided at the next meeting in March.

I thinks it is unlikely that this committee will reach the level of confidence in time for the March meeting, he stressed.

Regarding the context necessary for a possible drop, it does not have to be better than what we have seen, or even as good. It just has to be good, he said.

The moment is approaching […], according to our forecasts, he -he wanted to reassure, specifying that the Fed had to weigh the risk of moving too early, against the risk of moving too late.

The US central bank on February 1 kept its key rate in the range of 5.25 to 5.50% in which it has been since July, a decision taken unanimously by the 12 voting members of the FOMC. /p>

According to Mr. Powell, the inflation rate should continue to decline in the first half of the year and the Fed should reposition its objective in March of key rates, which was set at 4.6% at the end of its December meeting.

Nothing has happened in the meantime that would lead me to believe that [committee members] are going to drastically change their forecasts, Mr. Powell noted.

The economy is strong. The job market is strong. Inflation is reducing. There is no reason why this cannot continue. […] I really think the economy is in a good place.

A quote from Jerome Powell, chairman of the American central bank

The evolution of PCE prices, a measure favored by the Fed – which wants to bring it back to 2% -, showed underlying inflation – excluding energy and food – at the lowest in almost three years, at 2.9% year-on-year.

Economic growth was much stronger than expected in 2023, even accelerating by compared to 2022, at 2.5%.

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