“We have already seen Treasury Department borrowing costs increase significantly for securities maturing in early June,” Yellen said in a letter to congressional leaders on Monday. The Treasury Department released the letter hours after House Speaker Kevin McCarthy said, “We are far from complete negotiations to raise the debt ceiling.” Republicans are pushing for drastic spending cuts as a condition of the bill, according to Bloomberg. Democrats are proposing other fiscal tightening measures that the Republican Party rejects, while insisting that the fiscal measures be split.
McCarthy stressed that staff-level meetings are “not productive at all” a day before he joins other congressional leaders in a meeting with President Joe Biden at the White House. Earlier, Yellen warned of the possibility of a US default. The Treasury could run out of cash as early as June 1, she said. Since January, the Treasury Department has applied special accounting measures to stay within the statutory debt limit of $31.4 trillion.
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