Treasury's Yellen says US could default as soon as June 1

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Treasury Secretary Janet Yellen notified Congress that the U.S. is projected to reach its debt limit as early as June 1, if it is not raised or suspended before then.

, stating that her department had begun resorting to “extraordinary measures” to avoid a federal government default.

The U.S. plans to borrow $726 billion during the quarter. That’s $449 billion more than projected in January, due to a lower beginning-of-quarter cash balance and projections of lower-than-expected income tax receipts and higher spending. Eric Van Nostrand, acting assistant secretary for economy policy, said in a statement that “even if Congress ultimately raises the debt limit before a default occurs, the ensuing uncertainty could raise borrowing costs and induce other financial stress that would weaken our labor market and our standing in the world.”

“The U.S. government is again within mere months or even weeks of failing to make good on all its obligations. That is not a position befitting of a country considered the bedrock of the financial system, and only adds uncertainty to an already shaky economy.”

 

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Treasury Secretary Janet Yellen says US could hit debt ceiling as soon as June 1In a letter Monday to House and Senate leaders, Yellen urged Congress “to ... act as soon as possible” to address the $31.4 trillion limit on its legal borrowing authority.
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