US Treasury Secretary Janet Yellen told parliamentarians on Tuesday that a government could be created Not enough cash By October 18, unless Congress takes action to raise federal debt limits before the Treasury makes every effort to conserve resources.
“At that point, the Treasury has very limited resources left and will soon be exhausted,” Yellen said in a letter to Senator Banking Commission hearings. I repeated the comment.
The day after the Republican Senator refused to take steps to raise the country’s borrowing limits to pay for previously incurred government spending, she wrote in a letter, “From that day on, we will continue to fulfill all of the country’s promises. I’m not sure if I can do it. ”
Yellen appeared on Tuesday before the Senate Banking Commission, along with Federal Reserve Chairman Jerome Powell, to consider the actions of the two agencies to protect the economy from the coronavirus pandemic.
During the hearing, I was repeatedly asked about the approaching deadline. Raise the debt capYellen said that if he did not, it would be a “disastrous” event that would cause a “financial crisis and disaster.”
Powell also urged Congress to raise its debt limits on time to avoid default.
The Treasury has already implemented “special measures” to maintain the flow of government funds after reaching the debt cap in the summer. However, although the exact dates may vary, Yellen said these measures would end in about 20 days.
Following Yellen’s warning, some Treasury securities that matured within the following month were sold, and one-month Treasury short-term securities yields rose to their highest levels in a few months.
So far, investors have largely taken the view that parliamentary standoffs on this issue will be resolved before the government reaches the default threshold, but in early September. Investment Bank Goldman Sachs The current standoffs are described as “the riskiest debt limit in 10 years.”
Yellen said in a pre-hearing testimony that the United States should return to full employment next year despite headwinds from the coronavirus delta mutant. Recovery from the recession caused by the COVID-19 pandemic remains “fragile but rapid.”
“Our economy continues to expand and regain a significant portion of the employment lost in 2020, but the key challenges from the Delta variant continue to slow recovery and substantively to a vibrant economy. It presents a barrier, “Yellen said.
“Still, I’m optimistic about the medium-term trajectory of the economy and I look forward to returning to full employment next year.”
According to Yellen, the U.S. could run out of cash by October 18 without raising its debt cap.
Source link According to Yellen, the U.S. could run out of cash by October 18 without raising its debt cap.