Federal Reserve Chair: US On Unsustainable Fiscal Path

Federal Reserve Chair: "The U.S. federal government is on an unsustainable fiscal path. And that just means that the debt is growing faster than the economy."

WASHINGTON - The Federal Reserve Chair Jerome Powell, while speaking during an interview with 60 Minutes said that the United States is on an "unsustainable fiscal path" and added that the country's debt is outpacing its economy.

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"The U.S. is on an unsustainable fiscal path” he stated, adding "The U.S. federal government’s on an unsustainable fiscal path. And that just means that the debt is growing faster than the economy. So, it is unsustainable. I don’t think that’s at all controversial".

Chair of the Federal Reserve of the United States Jerome Powell

The current total gross debt held by the United States now stands at $34 trillion, with Japan and China being two of the largest creditors to the United States. Of that debt, around 7.6 trillion is held by foreign countries, with Japan and China being the largest holders of US debt.

Japan owns around $1.1 trillion of the debt, while China owns around $859 billion, a number that has been steadily shrinking from over 1 trillion in 2022, which is the year that the country's U.S. debt fell under a trillion for the first time since 2010 due to increasing U.S. Treasury interests rates as a result of the Federal Reserve raising rates to fight rising inflation in the country.

The annual inflation rate was down to 3.1% last month, but the current rate now stands at 3.4% which still sits higher than the 2% target rate by the Federal Reserve, albeit far lower than the over 9% it had hit in June of 2022.

What Is Inflation?

Inflation is the rate at which prices increase for goods or services over a period of time. The annual (or yearly) rate is the rate at which prices have increased in a given month compared to the same month the previous year.

Powell: We’re Borrowing From Future Generations, It's Past Time To Get Back On A Sustainable Fiscal Path