Federal Reserve Chairman Jerome Powell said on Wednesday that without Congress raising the federal debt ceiling it would be unprecedented and would have a highly uncertain and negative impact on the economy.
In a press conference after the Federal Open Market Committee (FOMC) meeting, which decided to raise interest rates by 0.25 points, Powell said that without Congress’ action, “we are entering uncharted territory and the impact on the U.S. economy is highly uncertain and negative.” There is a risk of becoming,” he said.
“No one should assume that the Federal Reserve can protect the economy from the potential short- and long-term consequences if the government fails to make payments on time,” he said. He also explained that although the debt ceiling issue was discussed as one of the risks at the two-day meeting until the 3rd, it did not affect the interest rate decision.
Fed Chairman Powell calls for debt ceiling hike in a timely manner
Source: Bloomberg
Treasury Secretary Janet Yellen told lawmakers on Wednesday that the special fiscal measures to keep the federal debt below the ceiling could be used up as early as June 1.
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Powell said the Federal Reserve would not be involved in negotiations on raising the debt ceiling. He said he would not advise either the White House/Democrats or Republicans.
Original title:Powell Says Fed Can’t Protect US Economy From Debt Default(excerpt)
(This article partially uses automatic translation)
2023-05-03 23:43:00
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