But when she attended the G20 leaders summit in Indonesia that month, she said Republican control of the House of Representatives posed a new threat to the US economy.
“I’ve always been worried about the debt ceiling,” Yellen told The New York Times in an interview in which she urged Democrats to use their remaining time in control of Washington to dismantle the gender line. debt due after the 2024 election. “Anyway that Conference can find to complete it, I’m all for.”
Democrats did not heed Yellen’s advice. Instead, the United States has spent much of this year inching closer to the brink of default, as Republicans refused to raise or suspend the nation’s $31.4 trillion borrowing limit without limits. spending limits and back some parts of President Joe Biden’s agenda.
Now the federal government’s cash balance has fallen below $40 billion. And Friday, Yellen told the legislators that day X – the time when The financial ran out of money to pay all the bills on time – coming June 5th.
Yellen already has her contingency plans in place, but this week signals that she’s been thinking about how to prepare for the worst.
The Treasury Department has developed a default book from previous debt-limit impasses in 2011 and 2013. And Yellen has become quite familiar with them: During the last two significant deadlocks. most – in 2011 and 2013 – she was the leader. Federal Reserve Officials are pondering how the central bank will try to stem the fallout from default. However, Yellen said she was concerned about the vulnerability of market infrastructure in the event of a default and said officials should think about ways to plan for a future default. future.
“Given that we may face a similar situation somewhere in the future, I think it’s important that we think about the lessons learned so that we and the market will be better prepared. if faced with such a situation again,” Yellen said.
