In an interview with Bloomberg on Monday, Treasury Secretary Janet Yellen said that even with a rate hike, interest rates are lower than they have been in decades, so “we can probably get out on a fiscally sustainable path.” Ta. [a] The debt-to-GDP ratio is slightly high. ”
Yellen said President Joe Biden’s budget proposal “will stand.” [what I see as] A key metric that summarizes the burden of the budget deficit is interest costs, and the president’s plan would keep them at historic levels and not allow them to rise above them. ”
“But the federal deficit is now at levels not seen outside of recessions,” said Anne-Marie Hordern, host and chief political correspondent for Bloomberg. Is anyone seriously concerned about this conversation?”
Yellen responded: “Well, as I said, the interest cost of debt is a good way to measure its burden. Interest rates are generally falling and, despite recent increases, are at lower levels than they have been in decades. This means that metrics such as the debt-to-GDP ratio can probably be managed and a fiscally sustainable path can be charted. [a] Debt to GDP ratio is slightly high. But it is important to ensure that the real interest burden on the debt, a measure of the strain placed on the economy, rises and that it remains at historically normal levels. ”
to follow Ian Hanchett’s Twitter @Ian Hanchett
