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…
However, as we pointed out previously, 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), the Fed is starting to get nervous about the (un)sustainability of the US debt.
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…
via Zero Hedge http://ift.tt/2BWct2w Tyler Durden