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News - Powell warns of U.S. indebtedness
In a television interview, America's top monetary watchdog, Jerome Powell, appears concerned about his country's immense debt burden.
Federal Reserve chief Jerome Powell is apparently concerned about his country's high government spending, according to a television interview.
Powell was a guest on the program "60 Minutes" from CBS. Presenter Scott Pelley asked him about current events surrounding inflation and the health of the U.S. banking system.
Asked how the Fed chairman assessed the current national debt, Powell replied that they usually try "not to comment" on fiscal policy. Powell added, however, that the U.S. is "on an unsustainable fiscal path over the long term." This means that debt is currently growing faster than the economy, Powell said.
"We are borrowing money from future generations," he explained. In the long term, he worried about government spending. It was "time to make fiscal sustainability a priority."
The current US debt is $34 trillion. Relative to gross domestic product, total debt is currently 123 percent. According to 60 Minutes, the debt will grow to one million dollars per household by 2054.
In contrast, the Fed chief considered a widespread banking crisis "unlikely." The problem of a few regional banks with "concentrated risk" is "manageable," Powell said. In the past, the collapse of Silicon Valley Bank however, also a mistake by the Fed, he admitted.
Market observers are currently experiencing renewed unease about some U.S. banks. Last week, New York Community Bank shares lost more than 40 percent of their value after the company announced losses from its real estate business.
Nevertheless, the Federal Reserve has no plans for the time being to extend last year's bank rescue package, which expires on March 11, renewable. According to Arthur Hayes, founder of Bitmex, this could lead to a "mini crisis" for the banks before the central bank responds with an injection of liquidity. Which in turn, as has been shown in the past, also benefits Bitcoin.
