WASHINGTON: US Treasury Secretary Janet Yellen on Sunday warned that a failure by Congress to act on the debt ceiling could trigger a “constitutional crisis,” with consequences for financial markets and interest rates.
Yellen in an interview on ABC News’s “This Week” said debt ceiling negotiations should not take place “with a gun to the head of the American people,” and reiterated a warning to lawmakers the government could pay its bills only through early June without increasing the limit, which the government hit in January.
Debt limit action should be ‘without conditions’: Yellen
Deputy Treasury Secretary Wally Adeyemo also sounded the alarm on Sunday about the risks of a default during an interview on MSNBC’s “The Sunday Show.”
“Default is catastrophic for the United States,” Adeyemo said. “If we were to default on our debt, it would have a terrible impact on interest rates.”
US President Joe Biden will meet at the White House on May 9 with Republican House Speaker Kevin McCarthy, Republican Senate Minority Leader Mitch McConnell and top Democrats, kicking off a frantic few weeks of negotiation before the US runs out of money to pay its bills as soon as June 1.
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