Yellen warns against debt ceiling talks with ‘gun to the head of the American people’

WASHINGTON –

U.S. Treasury Secretary Janet Yellen on Sunday warned {that a} failure by Congress to behave on the debt ceiling may set off a “constitutional crisis,” with penalties for monetary markets and rates of interest.

Yellen in an interview on ABC News’s “This Week” stated debt ceiling negotiations mustn’t happen “with a gun to the head of the American people,” and reiterated a warning to lawmakers the federal government may pay its payments solely by way of early June with out rising the restrict, which the federal government hit in January.

Deputy Treasury Secretary Wally Adeyemo additionally sounded the alarm on Sunday concerning the dangers of a default throughout an interview on MSNBC’s “The Sunday Show.”

“Default is catastrophic for the United States,” Adeyemo stated. “If we were to default on our debt, it would have a terrible impact on interest rates.”

U.S. President Joe Biden will meet on the White House on May 9 with Republican House Speaker Kevin McCarthy, Republican Senate Minority Leader Mitch McConnell and prime Democrats, kicking off a frantic few weeks of negotiation earlier than the U.S. runs out of cash to pay its payments as quickly as June 1.

(Reporting by John Kruzel, enhancing by Deepa Babington)