{"id":1954085,"date":"2023-06-22T12:24:01","date_gmt":"2023-06-22T16:24:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/feds-powell-warns-us-budget-on-unsustainable-path-in-senate-testimony\/"},"modified":"2023-06-22T12:25:46","modified_gmt":"2023-06-22T16:25:46","slug":"feds-powell-warns-us-budget-on-unsustainable-path-in-senate-testimony","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/feds-powell-warns-us-budget-on-unsustainable-path-in-senate-testimony\/","title":{"rendered":"Powell warns US budget is unsustainable in Senate testimony."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffeds-powell-warns-us-budget-on-unsustainable-path-in-senate-testimony%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1954085&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"post_content\">\n<div class=\"aplayer_app\" data-source=\"https:\/\/vs1.youmaker.com\/assets\/2023\/0622\/b8a8617c-91dd-4cf1-b577-239067718f63\/audio.mp3?length=4836141&#038;duration=403\"><\/div>\n<\/p>\n<p><strong>The U.S. budget is on an unsustainable path, and it is crucial for policymakers to deal with it sooner rather than later,<\/strong> Federal Reserve Chair Jerome Powell told Senate lawmakers.<\/p>\n<p>Powell appeared before the Senate Banking Committee for his <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-chair-inflation-to-remain-elevated-before-moderating\/\" title=\"Fed chair: Inflation to remain elevated before moderating\">semi-annual monetary policy report<\/a>, and several Republican senators pressed the Fed Chair on the federal budget and its impact on inflation.<\/p>\n<p><strong>Sen. Tim Scott (R-S.C.), a Ranking Member on the committee, noted that the actions Congress takes \u201cimpacts significantly what you\u2019ve had to do in order to slow down Biden\u2019s absolutely explosive inflation.\u201d<\/strong><\/p>\n<p>The <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/feds-powell-warns-us-budget-on-unsustainable-path-in-senate-testimony\/\" title=\"Powell warns US budget is unsustainable in Senate testimony.\">central bank chief stopped short<\/a> of critiquing fiscal policy, but he did concede that the federal budget \u201cis on an unsustainable path.\u201d<\/p>\n<p>\u201cIt has been so for a long time. We need to deal with that sooner or later, and sooner is better than later. That\u2019s about, but that\u2019s what I can say, and that\u2019s what essentially all of my predecessors have said,\u201d Powell stated. \u201cWe are not charged with supervising fiscal policy in any way. It\u2019s just as a high-level matter from the standpoint of the economy.\u201d<\/p>\n<p>In an exchange with Sen. John Kennedy (R-La.), Powell agreed that less government spending and fewer stimulus measures tend to be disinflationary. At the same time, a 10 percent reduction in federal spending can result in less demand and potentially slow the economy.<\/p>\n<figure id=\"attachment_5217669\" style=\"width: 600px\" class=\"wp-caption alignnone\">\n    <a href=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2023\/04\/24\/id5217669-04222023-DSC08061-Tim-Scott-1200x800.jpg\"><figcaption class=\"wp-caption-text\"><noscript><\/noscript><\/figcaption><\/a><br \/>\n    <strong>Sen. Tim Scott (R-S.C.) meets with guests at the Iowa Faith &#038; Freedom Coalition in Clive, Iowa, on April 22, 2023. (Madalina Vasiliu\/The Epoch Times)<\/strong><br \/>\n  <\/figure>\n<p>\u201cLess demand would mean less economic activity, less spending, and that would have a negative effect on inflation,\u201d Powell said.<\/p>\n<p>After President Joe Biden signed the Fiscal Responsibility Act into law, the national debt topped $32 trillion for the first time. This included $25 trillion in debt held by the public and about $7 trillion intragovernment debt. Following the signing, the U.S. government borrowed close to $400 billion in one business day.<\/p>\n<h2>Inflation and Interest Rates<\/h2>\n<p>Although inflation continues to run higher than the Fed\u2019s goal, Powell does see a path of slowing price growth without substantial job losses. Fed officials do expect modest increases in the unemployment rates and gradual cooling, but \u201cmost of the loosening will come in the form of other ways.\u201d<\/p>\n<p>\u201cOur part of it is to try to get inflation under control, and that\u2019s what we\u2019re doing,\u201d he said. \u201cIdeally, we\u2019ll do that with as little as possible damage to the economy in the labor market.\u201d<\/p>\n<p>This was the second day of testimony for Powell who appeared before the House Financial Services Committee on June 21. He told House lawmakers that more rate hikes are ahead. While inflation has cooled, it \u201cremains well above\u201d the central bank\u2019s 2 percent target rate, indicating the policymakers have more work to do.<\/p>\n<p>\u201cInflation has moderated somewhat since the middle of last year,\u201d he said. \u201cNonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go.\u201d<\/p>\n<p>Powell explained that lowering inflation will be achieved by slowing the U.S. economy to below-trend growth. But officials will continue to be data-dependent and make decisions on a meeting-by-meeting basis.<\/p>\n<p>In May, the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/persistent-inflation-shocked-the-markets-heres-whats-rising-the-most\/\" title=\"Persistent Inflation Shocked The Markets\u2014Here\u2019s What\u2019s Rising the Most\">annual inflation rate slowed<\/a> to 4 percent, down from 4.9 percent in April and below the consensus estimate of 4.1 percent. The core inflation rate, which strips the volatile energy and food sectors, eased to 5.3 percent, down from 5.5 percent.<\/p>\n<p>\u201cWe have been seeing the effects of our policy tightening on demand in the most interest rate-sensitive sectors of the economy,\u201d the Fed chief stated. \u201cIt will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.\u201d<\/p>\n<p>According to the <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\">CME FedWatch Tool<\/a>, the futures market is mostly pricing in a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/federal-reserve-expected-to-hike-interest-rates-this-week-for-first-time-in-three-years\/\" title=\"Federal Reserve Expected to Hike Interest Rates This Week for First Time in Three Years\">quarter-point rate hike<\/a> at next month\u2019s Federal Open Market Committee (FOMC) policy meeting.<\/p>\n<p>Last week, the Fed signaled two more rate hikes this year, with the <a href=\"https:\/\/www.federalreserve.gov\/monetarypolicy\/fomcprojtabl20230614.htm\">Survey of Economic Projections (SEP)<\/a> showing that officials believe the median policy rate will climb to 5.6 percent, up from the March SEP of 5.1 percent. Officials also raised the benchmark fed funds rate expectation to 4.6 percent in 2024, up from 4.3 percent in the March estimate.<\/p>\n<h2>What Other Fed Officials Are Saying<\/h2>\n<p>Many regional central bank leaders have been participating in interviews and delivering speeches since last week\u2019s FOMC meeting. A common message among these officials is that they are concerned the institution will overshoot, meaning policymakers will raise interest rates too much and trigger a recession.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Chair Jerome Powell emphasized the urgency of addressing the unsustainable U.S. budget during his testimony before the Senate Banking Committee. Republican senators questioned Powell on the federal budget during his semi-annual monetary policy report.<\/p>\n","protected":false},"author":278,"featured_media":1954086,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-1954085","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1954085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1954085"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1954085\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1954086"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1954085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1954085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1954085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}