Meanwhile, government borrowing is more than US$23 trillion and growing, and interest payments jumped 10 per cent to US$572.8 billion in the year ended September 30.
Fiscal policy is"a key part of the counter cyclical reaction" when the economy is in trouble, he said. But the rising debt and deficit"could restrain fiscal policymakers' willingness or ability to support economic activity during a downturn."Despite those warnings, in the first of back-to-back days of testimony before Congress, Mr Powell said the US economy is likely to continue to grow though it faces continued risks from the global slowdown and trade disputes.
Mr Trump on Tuesday again accused the Fed of raising rates too quickly and cutting too slowly, even indicating he would like to see the kind of negative interest rates used in Europe and Japan, where economic growth has been persistently sluggish. Mr Powell said the rate cuts were designed to support continued growth"and to provide some insurance against ongoing risks."
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