Yellen Warns Delay in Raising Debt Limit Will Slow Economy | Associated Press

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WASHINGTON (AP) – Treasury Secretary Janet Yellen urges Congress to increase the government’s borrowing limit, a day after Senate Republicans blocked consideration of a bill that would have it made.

Yellen testified before the Senate Banking Committee on Tuesday in a hearing to brief Congress on the impact of the broad financial support programs the government adopted after the viral pandemic crippled the economy 18 months ago.

If the debt limit is not raised by Oct. 18, Yellen warned, “America’s full confidence and credit would be jeopardized, and our country would likely face a financial crisis and recession. economic”.

In a separate letter she sent to congressional leaders on Tuesday, Yellen also said a prolonged battle to raise the limit could put the economy at risk.

“Waiting until the last minute,” the Secretary of the Treasury wrote, “can seriously damage business and consumer confidence, increase borrowing costs for taxpayers and negatively impact credit ratings. United States for the years to come ”.

Federal Reserve Chairman Jerome Powell, who is also testifying before the committee, acknowledges in his prepared remarks that inflationary pressures have remained high longer than Fed officials expected. If those pressures persist, Powell says, the Fed will eventually use its tools to slow price gains. The Fed normally does this by increasing its benchmark short-term interest rate.

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