9 months ago
Federal Reserve Chair Jerome Powell on Sunday said it is time for the federal government to once again make a priority of dealing with the national debt.
“The debt is growing faster than the economy, so it is unsustainable,” the Fed chief said in an interview with CBS’s 60 Minutes. “It's time for us to get back to putting a priority on fiscal sustainability. And sooner's better than later.”
With further prompting, he added: “You could say that it was urgent, yes.”
Powell’s comments, punctuated by caveats that the Fed shouldn’t be telling Congress what to do (“It's not our business”), come as lawmakers wrangle over the possibility of creating a fiscal commission to study spending.
The debt has come more into focus now because the Fed’s aggressive campaign to raise borrowing costs to kill inflation has increased interest payments for the government. Though the U.S. is still able to comfortably finance its more than $27 trillion in publicly held debt, increased spending on entitlements and interest could snowball in the coming decades, putting pressure on Washington to act earlier to rein in annual deficits.
“I think you're starting to hear now from people in the elected branches who can make that happen,” Powell said.
The central banker also reiterated that the Fed will likely lower borrowing costs this year but said that its next meeting in March is probably too soon for such a move. He said the Fed wants to see inflation data keep coming in low, as it has for the past six months.
“We just want to see more good data along those lines,” he said. “It doesn't need to be better than what we've seen, or even as good. It just needs to be good. And so, we do expect to see that. And that's why almost every single person on the [Fed’s rate-setting committee] believes that it will be appropriate for us to reduce interest rates this year.”
English (US)