Less than a week after Dallas Federal Reserve Bank President Robert Kaplan sounded the alarm over the level of debt that America’s government is projected to carry, Fed Chair Jay Powell told Congress today that “the US is not on a sustainable fiscal path.”

Treasury yields were already spiking…

Echoing the recent Goldman analysis, which warned that the recently implemented Republican spending plan could lead to an “unsustainable” debt load, Kaplan predicted the US fiscal future beyond 2 years: he said that while the corporate tax cuts and other reforms may boost productivity and lift economic potential, most of the stimulative effects will fade in 2019 and 2020, leaving behind an economy with a higher debt burden than before.

“This projected increase in government debt to GDP comes at a point in the economic cycle when it would be preferable to be moderating the rate of debt growth at the government level,” Kaplan said.

And now Fed Chair Powell is confirming that view.

However, as we pointed out previously, this sudden Fed anxiety comes nearly a decade after the US unleashed its biggest debt-issuance binge in history, doubling the US debt from $10 trillion to $20 trillion under president Obama, which was only made possible thanks to the Fed’s monetization of $4 trillion in deficits (and debt issuance).

To summarize Kaplan’s and Powell’s view: when US debt doubled in the past decade the Fed had no problems, and in fact enabled it. And now, it’s time to panic…

And stocks rallied on this headline…

Presumably since any “unsustainable” fiscal collapse would force an ‘independent’ Fed to monetize moar and moar and save the world… again?