WorldUS Treasury Secretary Yellen: Country's default could trigger a historic financial crisis

US Treasury Secretary Yellen: Country’s default could trigger a historic financial crisis

US Treasury Secretary Janet YellenAn article titled “Congress, Raise Your Debt Limit” was published in The Wall Street Journal.

In the article in question, Yellen stated that the USA came out of the crisis caused by the new type of coronavirus (Covid-19) epidemic, and that the country should not put itself in another financial trouble.

Reminding that Congress has increased or suspended the country’s debt limit about 80 times since 1960, Yellen stated that this had to be done again, otherwise the Treasury Department’s cash balance would fall to an insufficient level and the federal government would not be able to pay its debts.

“The United States has never defaulted. The country’s default could trigger a historic financial crisis that would only exacerbate the ongoing public health emergency,” Yellen said. made its assessment.

Pointing out that default can trigger a sudden increase in interest rates, a sharp fall in stock prices and other financial turmoil, Yellen said, “Our current economic recovery may turn into a recession. We can come out of this crisis as a permanently weaker nation.” used the phrase.

Yellen said she was confident that members of Congress would revisit the debt limit, but stressed the need to act quickly.

On September 8, US Treasury Secretary Yellen wrote to Speaker of the US House of Representatives Nancy Pelosi that it was unclear how long the measures to temporarily fund the federal government would last, urging her to act as soon as possible on the debt limit. He had appealed to Congress.

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