Search
 
News

Yellen Warns of U.S. Government Default

She sees risk of default as early as October, if Congress fails to act on a debt-limit hike when the two-year suspension ends on Saturday.

By Christopher Condon | July 27, 2021 at 07:29 PM
Photo: Janet Yellen

Secretary Janet Yellen said the Treasury Department will begin special steps next week to avoid breaching the U.S. debt limit as a two-year suspension of the ceiling ends, and urged lawmakers to act “as soon as possible” to avert a payment default.

There are scenarios in which the Treasury could exhaust its special measures and run out of cash “soon after Congress returns from recess” in September, Yellen said Friday in a letter to lawmakers. She said cash and such measures are expected to decrease by $150 billion on October 1 alone “due to large mandatory payments.”

Yellen’s warning strikes a more urgent note than a Congressional Budget Office (CBO) report issued Wednesday saying U.S. lawmakers likely have until October or November to raise or suspend the debt limit. She said the Treasury is unable to provide its own specific estimate of how long so-called extraordinary measures would last amid “heightened uncertainty” over payments and receipts during the coronavirus pandemic.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

 

Recommended Stories

Regional Bank Fears Spur Haven Buying

Benjamin Purvis & Michael Mackenzie |

U.S. Treasuries surge, as investors seek out safer assets amid worries about U.S. banks and as economic data points to a softening labor market.

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2023 ALM Global, LLC. All Rights Reserved.