Be careful not to want too much. Pushing US debt negotiations to their limits is already dangerous for the economy in itself, Treasury Secretary Janet Yellen warned Thursday, May 11, as former President Donald Trump defends a tightrope strategy on the subject. . Democrats and Republicans in Congress are currently unable to agree on raising the US public debt ceiling, and a prolonged stalemate could lead to a US default this summer, which would be never seen.
The mere fact of flirting with such a situation “can also lead to significant economic costs”, warned Ms. Yellen during a press conference in Niigata (central Japan) where a meeting of finance ministers is held from Thursday to Saturday. and G7 central bankers. “As we already learned in 2011, the mere threat of default can lead to a downgrade in our financial rating and weakened consumer confidence,” with interest rate hikes on loans, she added.
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“The hostage economy”
A default would produce an “economic and financial disaster” in the United States, with global repercussions, she also recalled, echoing similar statements from her and the White House in recent days. . A few hours before Ms. Yellen’s remarks in Japan, Donald Trump, who is seeking re-election as President of the United States in 2024, urged elected Republicans to cause a default unless they obtain from the Democrats massive budget cuts.
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US President Joe Biden has so far ruled out negotiating budget cuts and accused Republicans of holding the economy “hostage”. “There is no good reason to generate a crisis ourselves,” Yellen insisted on Thursday, recalling that the US Congress had already raised or suspended the debt ceiling around 80 times since 1960.
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2023-05-11 06:49:12
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