President Biden Says U.S. Default Will Weaken Dollar
Potential US default would jeopardize the dollar's status as the world's reserve currency, US President Joe Biden said on Monday
A potential US default could occur if Congress does not agree to raise the government debt ceiling, which prevents the Treasury from issuing new government bonds to finance government activities.
Earlier, US Treasury Secretary Janet Yellen warned that the resources of her department would be completely exhausted by October 18 and asked lawmakers to take action "as soon as possible."
US President Joe Biden called on Republicans to stop "playing Russian roulette" with the American economy, putting the country at risk of default.
Ewyden believes that failure to raise the debt ceiling will cast doubt on Congress's willingness to honor our commitments we have made. This will undermine the reliability of US government bonds, and will also threaten the status of the dollar as a world currency.
"America's credit rating will be downgraded, loan rates will skyrocket. If you don't want to help save the country, then get out of the way so as not to destroy it," Biden added.
He stated that he could not guarantee that the US would not default on its debt obligations. The American leader stressed that the solution to this problem will depend on the actions of the Republicans in Congress.
Last week, the House of Representatives of Congress approved the suspension of the national debt limit until December 16, 2022. Now the bill will have to be considered by the Senate, but there it will most likely not pass due to opposition from the Republicans.
Senate Republican leader Mitch McConnell on Monday sent a letter to the head of the White House, in which he made it clear that the US administration should not count on Republican help in solving the problem with the national debt limit.
Get any trading robot for free for 2 weeks.