Throughout the last several years, the United States Federal Reserve has opted to enlist an aggressive tightening campaign, driving interest rates. All to counter inflation, the long-term sustainability of these actions has been placed into question. Amid BRICS de-dollarization plans, Fed Chair Jerome Powell recently told 60 Minutes that the US Dollar is on an “unsustainable” path.
Powell discussed the overall US economic predicament when speaking to the CBS News program. With 2024 continuing a global shift away from the US dollar, Powell’s sentiment points to a rather grim picture. As alternative currencies and digital assets rise, the global reserve status of the greenback is seemingly placed into question.
Also Read: BRICS: 8 Banks Ban U.S. Dollar Transactions
Fed Chair Warns Over US Dollar Future As Global Focus Shifts
Over the last year, the BRICS bloc has seen a notable increase in its overall prevalence. Indeed, the economic alliance has grown in its quest to bring forth a multipolar world. Subsequently, as it has sought to lessen international reliance on the US dollar, the greenback is entering a time of increased fragility.
That was certainly echoed by the chairman of the United States Central Bank. Speaking to 60 Minutes, and amid the BRICS de-dollarization plans, Fed Chair Powell says the US Dollar is on an ‘unsustainable’ path. Specifically referring to the rather vulnerable state of the country’s mounting debt.
Also Read: When & Where is BRICS Summit 2024?
“In the long run, the US is on an unsustainable fiscal path,” Powell stated. “And that just means that the debt is growing faster than the economy, essentially meaning that we are borrowing from future generations.”
Altogether, Powell’s statement reads as a stern warning. Specifically, a warning regarding the out-of-control nature of US Debt. Ultimately, that should place a stark concern in countries that are seeking to rely on the greenback for international trade.
For the BRICS bloc, a move away from the US dollar was self-preservational. However, it has foreshadowed an impending downfall that could come in the next several years. Subsequently, as that collapse is burgeoning, the economic alliance has provided a key alternative in the form of the bloc’s de-dollarization initiatives. That could create the perfect storm to threaten the global reserve status of the world’s most powerful currency.