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    You are at:Home » آخر الأخبار » U.S. Debt Ceiling Crisis Looms: Janet Yellen Warns
    Financial Markets

    U.S. Debt Ceiling Crisis Looms: Janet Yellen Warns

    December 29, 2024
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    Janet Yellen - جانيت يلين
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    Janet Yellen Sounds the Alarm

    In a concerning economic development, U.S. Treasury Secretary Janet Yellen has warned that the country may hit its new debt ceiling by mid-January. In a letter addressed to House Speaker Mike Johnson and other members of Congress, Yellen emphasized that the Treasury will likely reach the limit between January 14 and 23, urging immediate congressional action to avert financial risks.

    Raising the Ceiling: A Political Stalemate

    In June 2023, Congress approved an increase to the debt ceiling to avoid default, setting the deadline for early 2025. However, the issue remains a point of sharp political contention, with Republicans typically opposing higher national debt, which has now surpassed $36 trillion.

    Extraordinary Measures to Save the Government

    If the ceiling is breached, the Treasury is prepared to enact “extraordinary measures” to keep government operations running. This includes a $54 billion reduction in outstanding debt by redeeming certain bonds.

    Economic Fallout if Congress Fails to Act

    Failure to raise the debt ceiling could lead to a government default, severely impacting the world’s largest economy. Historically, Congress has raised the ceiling over 100 times to fulfill financial commitments, avoiding catastrophic economic outcomes.

    Janet Yellen’s Warning Signs

    While the immediate effects of exceeding the ceiling may be severe, a potential default could trigger a global economic crisis. The Treasury’s early warning underscores the urgent need for bipartisan cooperation to prevent such a scenario.

    government default. Janet Yellen Treasury warning U.S. debt ceiling crisis U.S. economy
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