Janet Yellen sounds the debt ceiling alarm in closed-door meeting with top Wall Street bankers

19 May 2023

On Thursday, May 18, U.S. Treasury Secretary Janet Yellen met with top Wall Street bankers to discuss the United States' looming debt ceiling crisis. And according to Axios' Hans Nichols, Yellen didn't mince words during the closed-door meeting.

"The official readout of Yellen's meeting from the Treasury Department included many of her previous warnings about the debt ceiling," Nichols reports. "But it didn't mention at least two of her closed-door comments: that private forecasters have largely confirmed her early June estimates for when the U.S. will run out of money and that borrowing costs are already getting higher…. Yellen made her remarks in a closed-door meeting at the Bank Policy Institute, an industry association that advocates for the country's largest lenders…. according to a person in the room."

Yellen has been warning that the United States could default on its debt obligations as soon as June 1, resulting in an "economic and financial catastrophe." And she has been imploring President Joe Biden, House Speaker Kevin McCarthy (R-California) and Senate Majority Leader Chuck Schumer (D-New York) to avoid that calamity by reaching some type of budget agreement.

Nichols notes, "With talks proceeding between President Biden’s team and Rep. Garret Graves (R-La.), a key ally of House Speaker Kevin McCarthy (R-Calif), some progressive lawmakers are sounding the alarm about the potential direction of the talks. At the same time, a group of House conservatives want to break off negotiations, insisting that the debt ceiling bill the House passed last month should be their final offer."

Read Axios full report at this link.

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