Powell emphasizes seven years: US fiscal path 'unsustainable'

On May 20th, according to BlockBeats, Federal Reserve Chairman Powell has consistently emphasized a theme for nearly seven years: the unsustainable fiscal path of the United States. This wording has been repeatedly used by him to describe the federal deficit issue, although he has explicitly stated that the Federal Reserve has no authority to formulate fiscal policy and cannot solve this problem alone, its position has long been well-known. The responsibility of the Federal Reserve is to formulate monetary policy and regulate the banking system, rather than intervening in Washington's fiscal affairs. Although we are not responsible for fiscal policy, in the long run, fiscal policy will have a significant impact on the economy, "Powell said at a press conference in September 2018. At that time, he had only been in office for eight months and spoke frankly: "For a long time, we have been walking on an unsustainable fiscal path, which cannot be avoided. In the end, we must face reality - and the sooner, the better Seven years later today, Powell still holds this view. On April 16th, he warned that "we are maintaining a huge deficit at full employment, which urgently needs to be addressed." On May 7th, he reiterated that the debt "is heading towards an unsustainable path, and Congress must find a way back on track," but added that "this is not something we should make recommendations about. After Moody's cancelled the US AAA rating last Friday, the fiscal crisis became even more urgent. The agency pointed out that if Congress extends Trump's 2017 tax cuts according to Republican wishes, the deficit will increase by $4 trillion over the next decade. Powell and Trump also have differences on interest rate policy. Trump has recently put pressure on interest rate cuts again, while the Federal Reserve has maintained its benchmark interest rate of 4.25% -4.5% unchanged this month. The market expects to initiate two interest rate cuts within the year in September. Powell's term will end in May next year, and his directorship will continue until January 2028.