U.S. Treasury Secretary Janet Yellen has updated her forecast for the threat of default in the absence of an agreement in the dispute over the debt ceiling. Accordingly, a default threatens at the earliest on June 5, not as previously expected on June 1, as previously expected from a letter to the speaker of the US House of Representatives. The estimate is based on the latest available data. Yellen called on Congress to protect confidence in the U.S. and the country's creditworthiness and to act as soon as possible.
Negotiations have been going on for weeks
For weeks, Democrats and Republicans have been arguing in tough rounds of negotiations about raising the debt ceiling. In the United States, parliament decides the maximum amount of money the state can borrow. A default could have catastrophic consequences not only for the US economy.
Opposition leader McCarthy spoke on Friday of "progress" in talks with the White House. Earlier, several US media had reported that President Joe Biden's administration and the Republicans would come closer in the dispute, which has been going on for months. According to this, the debt ceiling could be raised for two years and thus beyond the presidential election of November 2024.
In return, there will be cuts in certain government spending. This is demanded by the Republicans, who make up the majority in the House of Representatives and can thus block an increase in the debt limit.