Yellen extends US debt limit default deadline to Dec 15
WASHINGTON (REUTERS) - US Treasury Secretary Janet Ms Yellen on Tuesday (Nov 16) extended a deadline for a potential US government default to Dec 15 from Dec 3, giving Congress more time to raise the federal debt ceiling as lawmakers also consider a massive social spending and climate bill. Ms Yellen said in a letter to congressional leaders that the adjustment was "based on our most recent information," a reference to Treasury tax collections and cash flow data. She said the Treasury would be able to make a US$118 billion (S$160 billion) transfer to the Highway Trust Fund required on Dec 15, a month after President Joe Biden's signing of a sweeping infrastructure bill on Monday. But the transfer would count against the debt ceiling, as the funds would be invested in non-marketable Treasury securities. "While I have a high degree of confidence that Treasury will be able to finance the US government through December 15 and complete the Highway Trust Fund investment, there are scenarios in which Treasury would be left with insufficient remaining resources to continue to finance the operations of the US government beyond this date," Ms Yellen said. She repeated her call for Congress t...
Relief rally in US stocks as default threat put off
NEW YORK (AFP) - Wall Street stocks rallied on Thursday (Oct 7) in a buoyant session propelled by relief at a congressional agreement that removed the near-term risk of a US debt default. Democratic and Republican Senate leaders reached an agreement to temporarily lift the debt ceiling through Dec 3 in a move that buys time for more negotiations in a divided Washington. "We've kicked the can down the road," said Kim Forrest at Bokeh Capital Partners. "And I think the more we kick the can down the road, the less likely the really aggressive kind of measures on taxes, and spending are. Wall Street doesn't like taxes." The Dow Jones Industrial Average ended at 34,754.94, up 1 per cent. The broad-based S&P 500 advanced 0.8 per cent to 4,399.75, while the tech-rich Nasdaq Composite Index gained 1.1 per cent to 14,654.02. Worries about a default have added to concerns about inflation and tightening monetary policy, prompting volatility in recent weeks. The Labour Department reported 326,000 new unemployment claims, seasonally adjusted, were filed last week, 38,000 less than the previous week's upwardly revised level and fewer than analysts had expected. The data come ahead of Friday's mu...
Republicans withhold support for US debt ceiling increase
WASHINGTON (AFP) - Republicans leaders in Congress on Tuesday (Sept 14) continued to withhold support for efforts by the Democratic majority to increase the United States debt ceiling. Treasury Secretary Janet Yellen warned last week that the government will run out of money next month unless lawmakers take action, and banking groups have urged Congress to move to prevent "irreparable harm" to the US economy. But Republican Senate Minority Leader Mitch McConnell said Democrats will have to resolve the issue on their own. "The Democratic leaders have every tool and procedure they need to handle the debt limit on a partisan basis, just like they are choosing to handle everything else," Mr McConnell said on the Senate floor. Congress is currently considering a US$1.2 trillion (S$1.6 trillion) infrastructure plan that has the backing of Democrats and some Republicans. Also on their agenda is a a massive social spending plan costing US$3.5 trillion over 10 years, which has only garnered the support of Democrats who plan to pay for it with tax increases on corporations and the wealthiest Americans. Mr McConnell objects to what he called a "massive reckless tax and spending spree". "When ...
Yellen warns of ‘unthinkable’ US default risk in August without debt limit hike
WASHINGTON (REUTERS) - United States Treasury Secretary Janet Yellen on Wednesday (June 23) warned Congress that the US risks a debt default and a new financial crisis as soon as August if lawmakers fail to act quickly to suspend or raise the federal borrowing limit. In testimony to a Senate appropriations sub-committee, Dr Yellen said defaulting on US debt obligations would be "unthinkable" and "would have absolutely catastrophic economic consequences". Dr Yellen said that to avoid uncertainty for financial markets, Congress should pass new debt limit legislation - allowing the Treasury to continue borrowing - before the latest suspension expires on July 31. A first-ever default on US government debt obligations "would precipitate a financial crisis, it would threaten the jobs and savings of Americans at a time when we're still recovering from the Covid pandemic", Dr Yellen said. "I would plead with Congress to simply protect the full faith and credit of the United States by acting to raise or suspend the debt limit as soon as possible." The Treasury in the past has been able to stave off potential default for several months by employing extraordinary cash flow management measures...