January  5, 2026

Former Federal Reserve Chair Janet Yellen warned that America’s mounting national debt could cripple policymakers and limit their ability to address the country’s other fiscal challenges.

Speaking at a panel on the "Future of the Fed" on Sunday, Yellen said that rising debt levels and political pressure had created the risk of “fiscal dominance” taking hold in the U.S.—meaning that a central bank is “pressured, implicitly or explicitly, to keep interest rates lower than warranted by macroeconomic conditions.”

“The preconditions for fiscal dominance are clearly strengthening,” said Yellen, who also served as President Joe Biden's Treasury Secretary, adding that such a development could hamper the Fed's ability to fulfil its central mandates of keeping prices stable and the labor market in good shape.

Read more:

https://www.newsweek.com/former-fed-chair-issues-major-debt-warning-11309836