US Treasury Secretary: "Federal Government Default on the 15th of Next Month"... Delayed by Two Weeks from Initial Expectation

Janet Yellen, U.S. Secretary of the Treasury
Photo by AP Yonhap News

[Asia Economy Reporter Kim Suhwan] Janet Yellen, U.S. Treasury Secretary, projected that a federal government default will occur on December 15, two weeks later than initially expected.

According to CNBC on the 16th (local time), Secretary Yellen conveyed in a letter to lawmakers that "after December 15, all measures to secure funds for executing the federal government's budget will be exhausted," warning of the impending situation.

Previously, Secretary Yellen had anticipated the default deadline to be December 3. By extending the deadline by about two weeks, it is analyzed that the U.S. Congress has gained additional time to resolve the federal debt ceiling issue.

Earlier in August this year, the debt ceiling suspension period ended, reinstating the limit, and the Treasury Department warned that all cash would be depleted by October 18. In response, Congress passed a law temporarily extending the debt ceiling six days before October 18.

Secretary Yellen has consistently warned that a federal government default would trigger a recession and threaten the role of the U.S. dollar as a safe-haven asset.

However, with the Republican Party opposing an increase in the debt ceiling, there are forecasts that bipartisan negotiations to adjust the debt ceiling will be difficult ahead of the default deadline.

CNBC predicted, "The Democratic Party will likely have to pass the debt ceiling increase bill on its own."

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