Secretary of the Treasury Janet Yellen are sounding a urgent ask Congress to raise the government’s borrowing limit, an day after Senate Republicans blocked consideration by an bill that would have done so.
Yellen is testifying Tues to the Senate Banking Committee at an hearing to update Congress on the impact by the vast financial support programs the government enacted after the viral pandemic paralyzed the economy eighteen months ago.
If the debt limit Is not raised along October. Eighteen, Yellen warned, “the full faith and credit by the United States government would be impaired, and our country would likely face an financial crisis and economical recession.”
In an separate letter she sent Tues to congressional leaders, Yellen also said that an prolonged battle over raising the limit could imperil the economy.
“Waiting till the last minute,” the Secretary of the Treasury wrote, “can cause serious harm to business and consumer confidence, raise borrowing costs as taxpayers, and negatively impact the credit rating by the United States government as yrs to come.”
Federal Reserve Chair Jerome Powell, who’s also testifying to the committee, is acknowledging in his prepared remarks that inflation pressures have remained high longer than Fed officials had expected. If those pressures should persist, Powell says, the Fed will eventually use it is tools to slow price gains. The Fed normally does so along raising it is benchmark short-term interest rate.