Yellen says without debt limit hike, U.S. could face August default risk
- Wall St falls as Delta worries outweigh earnings, M&A cheer
- Tencent (TCEHY) Falls Sharply as State Media Describes Online Games as ‘Spiritual Opium’, Company Vows to Improve
- Oil falls in volatile session on concerns over COVID spread
- Clorox (CLX) Falls Sharply as COVID-19 Demand Wanes
- Dollar languishes, other safe haven currencies shine amid Delta caution
U.S. Treasury Secretary Janet Yellen answers questions during the Senate Appropriations Subcommittee hearing to examine the FY22 budget request for the Treasury Department on Capitol Hill in Washington, DC, U.S., June 23, 2021. Greg Nash/Pool via REUTERS
Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.
WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen on Wednesday urged Congress to raise or suspend the federal debt limit as soon as possible, warning that if lawmakers fail to act, the United States could face a serious risk of default as soon as August.
"I think defaulting on the national debt should be regarded as unthinkable," Yellen said in testimony to a Senate Appropriations subcommittee. "Failing to increase the debt limit would have absolutely catastrophic economic consequences."Yellen said that to avoid uncertainty for financial markets, Congress should pass new debt limit legislation - allowing the Treasury to continue borrowing - before the latest suspension expires on July 31.
The Treasury in the past has been able to stave off potential default for several months by employing extraordinary measures such as suspending contributions to government employee pension funds, but spending on COVID-19 relief programs has added uncertainty to government cash flows.
These measures could be exhausted in August, when Congress takes its traditional summer recess, she said.
(Reporting by David Lawder; Editing by Andrea Ricci)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- New York AG says probe found Gov. Cuomo sexually harrassed multiple women, broke laws
- Independent Investigators Find Governor Cuomo Sexually Harassed Multiple Women, Violated State and Federal Laws
- Fed's Daly says labor market not tight, jobs recovery underway
Create E-mail Alert Related CategoriesGeneral News, Reuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!