Chairman Powell Warns of Unsustainable US Debt in 2024 Interview
Federal Reserve Chairman Jerome Powell has declared the US national debt, exceeding $34 trillion, as “unsustainable.” During a February 4, 2024, interview on CBS’s “60 Minutes,” Powell emphasized the need for an adult conversation among officials to address the fiscal trajectory. He urged a return to prioritizing economic sustainability, emphasizing the importance of timely action.
While the Federal Reserve noted improved balance in employment and inflation risks, it hinted at unlikely rate cuts. In January 2024, interest rates remained unchanged for the fourth consecutive meeting, with Powell reiterating the improbability of a rate cut at the March 2024 Federal Open Market Committee meeting.
Powell stressed that the committee’s confidence level for a rate cut by March was unlikely, emphasising the need for an excellent, not just better, economic scenario. The Fed’s benchmark interest rate stands at 5.25–5.50%, reaching a 23-year high. Powell anticipates a review of interest rate goals in March 2024, foreseeing a continued decline in inflation during H1 2024.
Despite the outlook, Powell remains cautious, noting no significant changes in forecasts. The Chairman’s remarks highlight the critical need for fiscal responsibility amid growing concerns about the sustainability of the US national debt.