Federal Reserve Chairman Jerome Powell has expressed concerns about the United States’ fiscal path, stating that it is unsustainable and should be a top-level issue. Speaking at the ECB Forum on Central Banking in Sintra, Portugal, Powell highlighted the need to address the country’s large deficit sooner rather than later.

While Powell refrained from commenting on any specific administration’s policies, he emphasized the importance of returning to a sustainable financial footing. He acknowledged that fiscal policy is the responsibility of elected officials and, as such, the Federal Reserve does not comment on it, especially in advance of a presidential election. However, Powell noted that the US is currently running a significant deficit despite being at full employment, and the level of debt is not sustainable in the long run.

Powell believes that addressing this issue should be a priority, as running such deficits during prosperous economic times is not feasible in the long term. While he cannot predict the exact timing, he stressed the importance of taking action sooner rather than later.

As of now, the US government has a $1.2 trillion deficit and is burdened with $34.8 trillion in debt.