Jerome Powell gave an interview at The Economic Club of Washington, D.C. as the annual U.S. deficit reaches new sustained highs above $1 trillion, saying that he is very worried about an enormous pile of U.S. debt totaling $21.9 trillion, while $16 trillion is owed by the public.
“I’m very worried about it,” said Powell. “From the Fed’s standpoint, we’re really looking at a business cycle length: that’s our frame of reference. The long-run fiscal, non-sustainability of the U.S. federal government isn’t really something that plays into the medium term that is relevant for our policy decisions.”
In part of the debt is because of continued rate increases under Powell, the interest cost on that debt could start to become a bigger burden and concern. “We’re waiting and watching,” said Powell when asked about rate hike. He mentioned that Fed can be “patient” because inflation is low and under control.