Former Secretary of the Treasury, Steve Mnuchin, warned that the U.S. economy would have a significant downturn this year amid concerns over inflation as the Federal Reserve wants the prices under control.

During an interview with Fox News on Jan. 31, Mr. Mnuchin said the U.S. economy is facing “significant issues.” “We’re going to see a significant slowdown of the U.S. economy over the next six months,” he said.

On Jan. 31, the Federal Reserve left interest rates unchanged at the first 2024 policy meeting, signaling that officials might not reduce the benchmark federal funds rate “until there is greater confidence” that inflation is inching toward the central bank’s target rate of 2 percent.

It’s unlikely that the central bank will pull the trigger on a rate cut in March, Fed Chair Jerome Powell told reporters during the post-Federal Open Market Committee (FOMC) meeting news conference.

The move comes as the Federal Reserve has increased interest rates 11 times since March 2022 in an effort to combat inflation.

During the interview, Mr. Mnuchin blamed the Biden administration for the high prices and criticized the Fed for its late response to inflation. “After we left, there has been continued trillion dollars of spending. And that’s really what fueled inflation and what’s created very high prices,” he said.

“The Fed was late to raising interest rates. And that was a result of their view that inflation was going to come down. When it didn’t, they’ve raised interest rates to very high levels,” Mr. Mnuchin noted.

Mr. Mnuchin expected a market correction and recommended the U.S. dollar as the safest heaven for investors to put their money in despite the disappointing economic outlook.

In the Fed meeting on Wednesday, the Fed noted that “Inflation has eased over the past year but remains elevated,” and Mr. Powell said the U.S. economy hasn’t yet achieved a soft landing, contradicting the White House’s economic position on the issue.

“I would not say we have achieved a soft landing yet,” he said. “We have a ways to go to achieve a soft landing. We are not declaring victory.”

In the interview, the former Treasury Secretary praised the economy during the Trump administration, particularly tax cut policy. He also endorsed the 45th president for his 2024 White House bid, unlike many other former Trump cabinet members. “I support and endorse President Trump because I believe in his policies. And I’m proud of both the national security and the economic policies that we put in place,” Mr. Mnuchin said.

When asked about the economic priority for a potential second Trump administration, Mr. Mnuchin emphasized the need to bring the debt-to-GDP ratio under control by “a combination of growing the economy and looking at certain spending issues.”

Market ‘Rebellion’

Last week, during a speech on a panel at the Bipartisan Policy Center in Washington, JPMorgan Chase CEO Jamie Dimon warned of a market “rebellion” if out-of-control spending in Washington that keeps adding to the growing pile of U.S. government debt.

He recalled that in the early 1980s, the debt was around 35 percent of gross domestic product (GDP). Today, the debt-to-GDP ratio is above 100 percent, and Mr. Dimon said it’s projected to reach 130 percent by 2035.

“It’s a hockey stick,” Mr. Dimon said of his prediction for the future path of the debt-to-GDP ratio, applying a term often used to describe a chart pattern showing plotted values moving more or less sideways—before they suddenly spike and vault skyward.

While the United States has not yet suffered the “hockey stick” surge, Mr. Dimon warned that “when it starts, markets around the world—by the way, because foreigners own $7 trillion of U.S. government debt—there will be a rebellion.”

The bank chief added that a “rebellion”-type reckoning—which could involve a sudden deepening of the debt crisis as investors lose confidence in the government’s ability to service its debts and sell off U.S. Treasurys—would be “the worst possible way to do it.”

Analysts at the University of Pennsylvania estimate that when the debt-to-GDP ratio hits around 200 percent, it will hit the point of no return—when no amount of future tax increases or spending cuts could prevent the government from defaulting on its debt.

The warning from Mr. Dimon comes as the U.S. government added around $2.65 trillion to America’s national debt in 2023, topping a total of $34 trillion for the first time ever.

Andrew Moran and Tom Ozimek contributed to this report.