Fed Chief Issues Stark Warning to Congress on Deficits

Recently, the chairman of the Federal Reserve, Jerome Powell, testified to Congress that the federal budget deficit is reaching a point where it may become difficult for the central bank “to adequately respond to a financial crisis or recession.” During his testimony, Powell also argued for curbing federal spending (due to the current high levels of economic growth). Without this measure, as noted in the article, it will become more difficult for the government to use fiscal policies to stabilize the economy, but contractionary policies designed to combat the deficit could “support the economy’s growth over the long term.” Finally, even with the federal deficit concerns, Powell is confident in a sturdy America “that is likely to hold steady amid a series of global threats.”

https://thehill.com/policy/finance/482617-fed-chief-issues-stark-warning-to-congress-on-deficits