The US Treasury had warned of dire consequences if the state ran out of cash to pay its bills, which would make it unable to pay federal employees and lead to a possible rise in interest rates with spillover effects on companies and global markets.
A White House official said, on Friday, that “systematic progress” had been made in the negotiations in Washington to avoid a default on the United States’ debt, on the sidelines of the G-7 summit in Japan, which the US president is attending.
“The president has asked his team to keep up the pressure” for a bipartisan deal, the official said, adding that Biden “remains confident in Congress’ ability to take the necessary measures to avoid default” on US debt.
Earlier Thursday, Republican Speaker of the US House of Representatives Kevin McCarthy expected a breakthrough in the talks to reach an agreement to raise the public debt ceiling in a way that would allow the United States to avoid defaulting on its debt.
For its part, the US Treasury warned of dire consequences if the state ran out of cash to pay its bills, which would make it unable to pay federal employees and lead to a potential rise in interest rates with spillover effects on companies and global markets.
Treasury Secretary Janet Yellen said Monday that the United States could start defaulting on its debt “perhaps as early as June 1,” while the Congressional Budget Office expected that to happen in mid-June.
McCarthy responded Thursday, saying, “We are not there yet … We have not agreed on anything yet, but I see a way through which we can reach an agreement.” “I think we have the foundation now and everyone is working hard” to make it happen, he added.