National economy USA could reach new debt ceiling as early as mid-January
According to US Treasury Secretary Janet Yellen, the US could hit its debt ceiling as early as mid-January. Yellen called on the US Congress to act to protect "confidence" in the country and "its creditworthiness".
28.12.2024, 04:08
SDA
"The Treasury Department currently anticipates that the new limit will be reached between January 14 and January 23," Yellen explained in a letter to the Republican Speaker of the US House of Representatives, Mike Johnson, and other members of Congress. "At that point, the Treasury Department will need to take extraordinary measures."
The debt ceiling is the legal limit on the amount the US government can borrow to meet its obligations. It was last suspended in June 2023, but this period ends on January 1, 2025.
This means that on January 2, a new ceiling will be set equal to the amount of debt issued by the Treasury Department. However, if the US reaches this new ceiling, the way forward is likely to prove contentious - the issue of raising it has been a source of political tension for years.
The "extraordinary measures" mentioned by Yellen allow the Treasury to continue funding government activities. However, if the debt ceiling is not raised or suspended again before the Treasury's options are exhausted, the US could face a default with far-reaching consequences for the world's largest economy.
According to Yellen, the USA will not reach the upper limit immediately after the end of the suspension. According to the Treasury Secretary, this is due to the fact that the country's outstanding debt is expected to fall by around USD 54 billion on January 2 as a result of the repayment of securities.
