Powell on U.S. debt: the path is unsustainable

Investing.com -- Federal Reserve Chair Jerome Powell warned Wednesday that the growth of U.S. federal debt is on an unsustainable path that needs to be addressed, though he does not expect it to cause any near-term negative market events.

Speaking at a news conference, Powell stated that while the current debt level remains sustainable, "the path is unsustainable and the sooner we work on it, the better."

Powell expressed concern about the current fiscal situation, noting, "Right now we're running a very large deficit at essentially full employment and so the fiscal picture needs to be addressed, and it's not really being addressed."

The Fed Chair also discussed the relationship between interest rates, explaining that "many things move longer-term rates" and that movements are "not mostly what happens on the short-end." He added that "there's not a tight link between 10-year rates and the overnight rate."

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