U.S. 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.
U.S. Treasury Secretary Janet Yellen discusses "U.S.-China Economic Relationship" during a forum hosted by the Johns Hopkins University at the Nitze Building in Washington, U.S., April 20, 2023. REUTERS/Sarah Silbiger/File PhotoWASHINGTON, May 7 - U.S. 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.
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."
U.S. 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 U.S. runs out of money to pay its bills as soon as June 1.
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