WASHINGTON—Federal Reserve Chairman Jerome Powell said that the federal government can manage its debt at current levels but fiscal-policy makers should seek to slow its growth once the economy is stronger.
“Given the low level of interest rates, there’s no issue about the United States being able to service its debt at this time or in the foreseeable future,” Mr. Powell said Thursday in an interview with National Public Radio.
Congress and the White House have provided trillions of dollars of federal financial assistance since the Covid-19 pandemic hit the U.S. economy early last year, triggering a deep recession and uneven recovery. The resulting government budget deficits are expected to push the federal debt to 102.3% of gross domestic product by the end of the current fiscal year, up from 79.2% at the end of 2019, according to the Congressional Budget Office.
The CBO forecasts the debt will grow to 107% of GDP by 2031.
While a series of Covid-19 relief packages were passed in 2020 with strongly bipartisan support, GOP lawmakers have criticized President Biden’s $1.9 trillion assistance package, saying its measures are less targeted than previous bills and that the economy is already recovering.