Federal Reserve Chair Jerome Powell has cautioned that the United States is treading an unsustainable fiscal path, stressing that this issue demands top-level attention. Speaking at the ECB Forum on Central Banking in Sintra, Portugal, Powell highlighted the nation’s significant deficit, urging prompt action to address it.

While refraining from specific commentary on any administration’s policies, Powell emphasized the imperative for the US to regain fiscal stability. “Regarding fiscal policy, our role as non-elected officials limits us from preemptive remarks, especially during a presidential election cycle,” Powell noted. “However, it is evident that the United States faces a considerable deficit despite full employment, and while current debt levels are manageable, the trajectory is unsustainable.”

“This viewpoint is widely accepted,” Powell continued. “It is imperative that we elevate this issue to the forefront of national discourse. Many elected officials share this concern, emphasizing the need to chart a sustainable course forward. Running such deficits during economic prosperity cannot be sustained indefinitely. Although the timing remains uncertain, addressing these challenges sooner rather than later is preferable.”

As of the latest update, the US government has recorded a $1.2 trillion deficit with a total debt of $34.8 trillion.

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