© Reuters. FILE PHOTO: U.S. Treasury Secretary Janet Yellen discusses “U.S.-China Financial Relationship” throughout a discussion board hosted by the Johns Hopkins College on the Nitze Constructing in Washington, U.S., April 20, 2023. REUTERS/Sarah Silbiger/File Photograph
2/2
By Tyler Clifford and John Kruzel
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen on Sunday warned {that a} failure by Congress to behave on the debt ceiling might set off a “constitutional disaster,” with penalties for monetary markets and rates of interest.
Yellen in an interview on ABC Information’s “This Week” stated debt ceiling negotiations mustn’t happen “with a gun to the pinnacle of the American individuals,” and reiterated a warning to lawmakers the federal government might pay its payments solely via early June with out growing the restrict, which the federal government hit in January.
Deputy Treasury Secretary Wally Adeyemo additionally sounded the alarm on Sunday concerning the dangers of a default throughout an interview on MSNBC’s “The Sunday Present.”
“Default is catastrophic for the USA,” Adeyemo stated. “If we have been to default on our debt, it could have a horrible impression on rates of interest.”
U.S. President Joe Biden will meet on the White Home on Might 9 with Republican Home Speaker Kevin McCarthy, Republican Senate Minority Chief Mitch McConnell and prime Democrats, kicking off a frantic few weeks of negotiation earlier than the U.S. runs out of cash to pay its payments as quickly as June 1.