Janet Yellen, Treasury Secretary, warns that not increasing the debt ceiling would lead to an “economic catastrophe.”
Janet Yellen warns of dire economic consequences if U.S. defaults on its debt, emphasizing that it would result in an economic catastrophe. The Treasury Secretary highlights the urgent need for Congress to raise the debt ceiling, which is set to expire on July 31.
Yellen notes that failure to do so would mean the U.S. government would be unable to pay its bills, which would trigger a recession even worse than the one caused by the 2008 financial crisis. She also notes that defaulting on debt obligations could cause interest rates to skyrocket and lead to a loss of confidence in the U.S. economy, with devastating effects on global markets.
Despite the urgency of the situation, negotiations to raise the debt ceiling have become increasingly contentious, with Republicans demanding steep spending cuts in exchange for their support. Yellen urges Congress to act quickly and avoid the potentially catastrophic consequences of failing to raise the debt ceiling.
Re-reported from the story originally published in CNBC.
