Yellen Warns U.S. Approaching Debt Limit Juncture
1min read U.S. Treasury Secretary Janet Yellen has issued a warning that the U.S. is approaching a critical juncture regarding its debt limit. Speaking before the House Appropriations Committee, Yellen stated that the Treasury is on a "warning track" as it nears the point where it may exhaust its ability to avoid breaching the federal debt limit. However, she did not provide a specific timeline for when this might occur.
Yellen explained that the Treasury is still in the process of tallying tax revenues from the latest filing season. The debt limit, which was reinstated at the beginning of January, has been managed through extraordinary accounting measures to ensure that the Treasury can continue to make payments on the federal debt without breaching the limit. According to analysts' forecasts, the Treasury may not need Congress to raise or suspend the debt limit until August to October.
Yellen emphasized that the Treasury will notify Congress when it believes the "X Date" is approaching. The "X Date" refers to the point at which the Treasury would be unable to pay all government bills on time. She reiterated that the U.S. government will never default on its obligations and pledged that the Treasury will not resort to "tricks" to circumvent the debt limit. This warning highlights the importance for Congress to address the debt limit issue promptly to avoid potential disruptions in government operations and financial markets.
Ask Aime: How will the U.S. Treasury's debt limit warnings affect the stock market?
