US Treasury Secretary Janet Yellen sent a letter to Congress on Friday urging lawmakers to raise the spending limit. Yellen stressed that the country will reach the statutory debt limit on January 19, 2023. He warned that “the government’s default would cause irreparable damage to the U.S. economy, the livelihoods of all Americans, and global financial stability.”
Yellen warns of approaching debt ceiling, urges Congress to act quickly
On Friday, January 13, 2023, the US Treasury Department issued a press release containing a letter written by Janet Yellen, the 78th US Treasury Secretary. The letter is addressed to the House of Representatives and newly appointed 55th Speaker Kevin McCarthy (R-CA).
In the letter, Yellen warns of the looming debt limit and urges Congress to act quickly before the country’s $31.4 trillion debt authority runs out to prevent the country from defaulting on its obligations. Although a temporary solution could be used to avoid defaulting on US obligations.
The Treasury secretary insists that using a process known as “emergency measures” could buy Congress more time to increase the US’s borrowing authority. The process, similar to moving money from one account to another to make sure bills are paid on time, allows the Treasury Department to commingle money to prevent U.S. defaults. However, Yellen notes that this can only be done for a limited time.
“The length of time that emergency measures can continue is subject to significant uncertainty due to a variety of factors,” Yellen wrote. He added: “Cash and emergency measures are unlikely to run out before early June.” The Treasury Secretary continued:
I respectfully urge the Congress to act immediately to preserve the full faith and credit of the United States.
During Friday’s press briefing, White House press secretary Karine Jean-Pierre was asked about the looming debt limit, and she said, “We believe that when it comes to the debt limit, it’s been bipartisan for years and decades,” Jean-Pierre said. told reporters. “And it has to be done bilaterally. And it has to be done unconditionally. That’s important here.”
US stock markets ended in the green on Friday as the four benchmark US stock indexes – the Dow Jones Industrial Average (DJIA), the S&P 500, the Nasdaq Composite and the Russell 2000 – closed higher. In addition, the world’s most traded precious metals – gold, silver and platinum – have been rising recently.
On Friday, the New York spot price of gold rose by 1.26% to about $1,921.60, while the price of silver was $24.38 an ounce at the end of Friday. The volume of the global cryptocurrency market also increased by 4.1% on Friday, with BTC rising above $21,000 per unit zone. On Saturday, January 14, 2023, the price of bitcoin falls just below the $21K range.
What do you think of Yellen’s letter to Congress urging lawmakers to raise the spending limit? Let us know what you think about this topic in the comments section below.
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