Powell Reiterates Concerns Over U.S. Fiscal Path Amid Debt Challenges

According to BlockBeats, Federal Reserve Chairman Jerome Powell has consistently highlighted the unsustainable nature of the United States' fiscal trajectory over the past seven years. Despite the Federal Reserve's lack of authority in setting fiscal policy, Powell has repeatedly addressed the federal deficit issue, emphasizing its long-term economic impact. In a 2018 press conference, shortly after assuming his role, Powell stated, "We are on an unsustainable fiscal path, and this reality must be confronted sooner rather than later." His stance remains unchanged, as evidenced by his recent warnings on April 16 about maintaining significant deficits during full employment, urging for solutions. On May 7, Powell reiterated that the national debt is on an unsustainable path, urging Congress to take corrective measures, while clarifying that it is not the Federal Reserve's place to offer specific recommendations. The urgency of the fiscal crisis intensified after Moody's downgraded the U.S. AAA rating last Friday. The agency warned that extending the 2017 tax cuts, as favored by Republicans, could increase the deficit by $4 trillion over the next decade. Powell and U.S. President Donald Trump have also differed on interest rate policies. Trump has recently pushed for rate cuts, while the Federal Reserve has maintained the benchmark rate at 4.25%-4.5% this month. The market anticipates two rate cuts later this year, starting in September. Powell's term as chairman is set to conclude in May next year, although his position as a board member will continue until January 2028.