Friday, December 8, 2023

Yellen sees “highly likely” that the US defaults in June if the debt ceiling is not raised

The secretary of United States TreasuryJanet Yellen, considers it “highly likely” that the country will not be able to meet its payment obligations from the beginning of June if Congress does not act to raise or suspend the borrowing limit.

“We estimate that it is highly probable that the Treasury will not be able to continue fulfilling all the obligations of the Government if the Congress has not acted to raise or suspend the debt limit in early June and potentially as soon as June 1,” Yellen warns in a statement. letter forwarded to the speaker of the House of Representatives, Kevin McCarthy.

In this sense, remember that previous situations of stagnation in the debt limit negotiations demonstrated that waiting until the last moment to suspend or raise the ceiling can seriously damage the confidence of companies and families, as well as increasing short-term financing costs and negatively affecting the US rating.

“If Congress fails to raise the borrowing limit, it would cause severe difficulties to families, it would damage our global leadership and question our ability to defend our national security interests,” he adds.


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