Yellen Cash Crisis Warning
Yellen wrote a new letter to US House Speaker Kevin McCarthy to share an update on the debt limit.
In the letter in question, Yellen stated that it is estimated that the Treasury will not be able to meet all of the government’s obligations unless Congress raises or suspends the debt limit in early June, and possibly on June 1.
Noting that these estimates are based on available data, Yellen noted that federal revenue, spending and debt may differ from these estimates.
WARNING NOT TO BE LAST MINUTE IN THE DEBT LIMIT
Stating that the actual date Treasury has exhausted the extraordinary measures may be a few days or weeks after these estimates, Yellen said she will provide additional information to Congress next week as more information becomes available.
Yellen said: “We learned from previous debt limit conundrums that waiting until the last minute to suspend or increase the debt limit can severely damage business and consumer confidence, increase short-term borrowing costs for taxpayers and negatively affect the US credit rating.” she performed her assessment.
Stating that they have already seen Treasury borrowing costs rise significantly for securities due in early June, Yellen said that if Congress does not raise its debt limit, it will cause serious hardship for American families, the country’s global leadership is will see damaged and questions about its ability to defend the interests of national security, said it will create.
Yellen reiterated her call to protect America’s reputation by taking action before Congress as soon as possible.
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.
US President Joe Biden is expected to meet with congressional leaders on Tuesday to discuss the debt limit issue. (AA)
Source: Sozcu
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
