“I don’t want to be specific about when we’ll be doing updates…but definitely in the next few weeks,” Yellen said. On May 1, the US Treasury Secretary told lawmakers that the Treasury could run out of money as early as June 1. As the White House and congressional Republicans continue to wrestle in Washington over the debt ceiling and government spending, Yellen positioned the urgent need to issue more debt under the Biden administration and its bullish outlook on the economy. American economy.
The Congressional Budget Office updated its projections on Friday, saying US debt will reach 119% of gross domestic product by 2033, the highest in US history. “We’ve proposed $3 trillion in deficit reduction over 10 years, and I would say our budget’s fiscal trajectory is sound,” Yellen said, commenting on the news. However, she acknowledged that the level of debt could create problems, especially if interest rates remain high in the long term.
Federal Reserve Chairman Jerome Powell has repeatedly said he is concerned about the future state of US debt, and former Treasury Secretary Robert Rubin has said the trajectory of US debt was not viable. The primary measure of debt, according to Yellen, is inflation-adjusted interest expense as a percentage of GDP. She said the Biden administration predicted that figure could exceed 1%, an estimate she called “perfectly reasonable.”
US President Joe Biden and congressional leaders plan to resume debt ceiling talks next week. They were scheduled to meet on Friday, but the meeting was postponed as Republican and Democratic representatives continue negotiations.
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