{"id":31684,"date":"2018-02-27T14:23:23","date_gmt":"2018-02-27T19:23:23","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31684"},"modified":"2018-02-27T14:23:23","modified_gmt":"2018-02-27T19:23:23","slug":"fed-chair-admits-us-is-not-on-a-sustainable-fiscal-path","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31684","title":{"rendered":"Fed Chair Admits &#8220;US Is Not On A Sustainable Fiscal Path&#8221;"},"content":{"rendered":"<div id=\"block-zerohedge-page-title\" class=\"block block-core block-page-title-block\">\n<h3 class=\"page-title\"><a href=\"https:\/\/www.zerohedge.com\/news\/2018-02-27\/fed-chair-admits-us-not-sustainable-fiscal-path\"><span class=\"field field--name-title field--type-string field--label-hidden\">Fed Chair Admits &#8220;US Is Not On A Sustainable Fiscal Path&#8221;<\/span><\/a><\/h3>\n<\/div>\n<div id=\"block-zerohedge-content\" class=\"block block-system block-system-main-block\">\n<article class=\"node node--type-article node--view-mode-full\" role=\"article\">\n<footer class=\"node__meta\">\n<div class=\"submission-wrapper\"><\/div>\n<div class=\"a2a_kit a2a_kit_size_32 a2a_default_style\" data-a2a-icon-color=\"#222\">\n<div><\/div>\n<\/div>\n<\/footer>\n<div class=\"node__content\">\n<div class=\"clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item\">\n<p><a href=\"https:\/\/www.zerohedge.com\/news\/2018-02-21\/fed-president-sounds-panic-over-level-us-debt\">Less than a week <\/a>after Dallas Federal Reserve Bank President Robert<strong> Kaplan sounded the alarm<\/strong> over the level of debt that America&#8217;s government is projected to carry, <em><strong>Fed Chair Jay Powell told Congress today that &#8220;the US is not on a sustainable fiscal path.&#8221;<\/strong><\/em><\/p>\n<p>Treasury yields were already spiking&#8230;<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/2018-02-27_9-51-44.jpg?itok=tV4e2YrQ\" \/><\/p>\n<p>Echoing the <a href=\"https:\/\/www.zerohedge.com\/news\/2018-02-19\/goldmans-chart-showing-us-headed-banana-republic-status\">recent Goldman analysis<\/a>, which warned that the recently implemented Republican spending plan could lead to an &#8220;unsustainable&#8221; 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, <strong>most of the stimulative effects will fade in 2019 and 2020, leaving behind an economy with a higher debt burden than before. <\/strong><\/p>\n<blockquote><p><strong>&#8220;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,&#8221;<\/strong> Kaplan said.<\/p><\/blockquote>\n<p>And now Fed Chair Powell is confirming that view.<\/p>\n<p>However, as we pointed out previously, this sudden Fed anxiety comes <strong>nearly a decade after the US unleashed its biggest debt-issuance binge in history, <\/strong>doubling the US debt from $10 trillion to $20 trillion under president Obama, which was only made possible thanks to the Fed&#8217;s monetization of $4 trillion in deficits (and debt issuance).<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/2018-02-21_0.jpg?itok=dlbvPzdP\" \/><\/p>\n<p>To summarize Kaplan&#8217;s and Powell&#8217;s view:<u><em><strong> when US debt doubled in the past decade the Fed had no problems, and in fact enabled it. And now, it&#8217;s time to panic&#8230; <\/strong><\/em><\/u><\/p>\n<p>And stocks rallied on this headline&#8230;<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/2018-02-27_10-02-58.jpg?itok=6UY-fkgS\" \/><\/p>\n<p>Presumably since any &#8220;unsustainable&#8221; fiscal collapse would force an &#8216;independent&#8217; Fed to monetize moar and moar and save the world&#8230; again?<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Fed Chair Admits &#8220;US Is Not On A Sustainable Fiscal Path&#8221; Less than a week after Dallas Federal Reserve Bank President Robert Kaplan sounded the alarm over the level of debt that America&#8217;s government is projected to carry, Fed Chair Jay Powell told Congress today that &#8220;the US is not on a sustainable fiscal path.&#8221; [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,16888,827,18986,3650,4318],"class_list":["post-31684","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-jerome-powell","tag-united-states","tag-unsustainable-fiscal-path","tag-us-federal-reserve","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31684"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31684\/revisions"}],"predecessor-version":[{"id":31685,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31684\/revisions\/31685"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}