Treasury Secretary Janet Yellen told Axios she is “nervous” about the U.S. defaulting on its debt and cautioned that Americans likely will face a scary and spiraling recession if Congress doesn’t raise the debt ceiling this summer.
Why it matters: Yellen’s dark financial forecast is part of the Biden administration’s attempt to put political pressure on the new House GOP majority to raise the debt ceiling without delay or hesitation.
It’s also the unvarnished prediction of a former Fed chair who had a ringside seat to the 2011 debt ceiling showdown, when credit agencies downgraded U.S. debt for the first time in American history.
What they are saying: ”Of course, it makes me nervous,” Yellen told Axios from Johannesburg, South Africa, at the end of a 10-day trip across the continent. “It would be devastating. It’s a catastrophe.”
In the event of a default, “we’ll have a financial crisis,” she said. “And I believe we would have recession in the United States.” Läs artikel