US Treasury Secretary Yellen: Could be out June 1

Yellen has written a new letter to the Speaker of the United States House of Representatives, Kevin McCarthy, about the debt limit.

Stating that the Treasury Department wrote to McCarthy to inform him of the federal government’s ability to continue funding his activities, Yellen recalled that in a January 13 letter, cash and emergency measures are unlikely to run out before from the beginning of June.

“After reviewing recent federal tax collections, our best guess is that unless Congress raises or suspends the debt limit, the government won’t be able to meet all of its obligations until early June, and possibly June 1.” Yellen said. made an assessment of it.

“CONGRESS MUST ACT AS SOON”

Noting that this estimate is based on available data, Yellen noted that the actual date Treasury extraordinary measures will expire may be a few weeks after these estimates, as federal revenues and spending are inherently volatile.

Yellen stressed that it is not possible to predict exactly when the Treasury will default on its government debts, adding that she will continue to keep Congress informed as more information becomes available.

Janet Yellen said: “Given current estimates, it is imperative that Congress act as soon as possible to raise or suspend the debt limit with greater long-term certainty that the government will continue to make its payments.” she used the phrases.

DECISION TO SUSPEND THE ISSUANCE OF STATE AND LOCAL GOVERNMENT BONDS

Noting that the Treasury Department has also suspended issuance of State and Local Government Series (SLGS) treasury bonds, Yellen said these are special purpose treasury bonds issued to states and municipalities, their issuances are included in the debt limit, this step However, steps will be taken to manage the risks associated with the debt limit, which could be costly as state and local governments would be deprived of an important tool to manage their finances.

“We learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can seriously damage business and consumer confidence, increase short-term borrowing costs for taxpayers, and negatively affect the US credit rating,” Yellen said. she performed her assessment.

Noting that if Congress does not raise the debt limit, this situation will cause serious hardship for American families, Yellen stressed that it will harm America’s global leadership and raise questions about its ability to defend its national security interests.

Yellen urged Congress to take action as soon as possible to protect America’s reputation.

DEBT LIMIT DIFFERENCE

In the US, the federal government has reached the $31.4 trillion debt limit that could lead to default.

The debt limit, or debt ceiling, means “the upper limit of the amount of money the US government can borrow to pay its debts.”

Republicans, who have a majority in the House of Representatives, favor major spending cuts in the debt limit negotiations. Democrats insist on raising the debt limit and reject Republican proposals to cut certain spending.

There is concern that the debt limit issue, which has become an impasse between Democrats and Republicans, will rock markets. As US recessionary expectations rise, the two-party standoff over the debt limit carries more risk than ever. (AA)