U.S. Treasury Secretary Janet Yellen on Sunday firmly stated that the United States will never default on its debt obligations, seeking to calm financial markets after warnings from JPMorgan Chase CEO Jamie Dimon about potential bond market turmoil.
Defiant Assurance Amid Fiscal Concerns
In a televised interview, Yellen declared: “The United States will never default. That will never happen. We’re on watch, but we will never hit the wall.” Her comments come as Congress prepares to debate a major budget bill that could significantly increase federal deficits.
Debt Ceiling Debate Intensifies
The proposed legislation, dubbed the “Beautiful Big Bill” by former President Trump, would raise the debt ceiling by $4 trillion. However, the measure faces potential hurdles from Congressional disputes and Republican infighting. Yellen declined to specify the so-called “X-date” when Treasury might exhaust its extraordinary measures to avoid breaching the debt limit.
“We’re not publishing an ‘X-date’ because we’re using it to move the bill forward,” Yellen stated, maintaining her previous warning that the U.S. could reach its borrowing capacity by August without congressional action.
Clash With Wall Street Titan
The Treasury Secretary directly countered recent warnings from JPMorgan’s Dimon, who predicted an inevitable bond market collapse due to excessive government spending and quantitative easing. Dimon had advised the Trump administration to pursue more sustainable fiscal policies, stating: “I told you this would happen. When it does, you’ll panic, but I won’t – we’ll be fine.”
Analysts Weigh In on Timing
While Yellen maintains her August warning, Wall Street analysts and forecasting agencies project the critical “X-date” could arrive anytime between late August and mid-October, creating uncertainty in financial markets.
The coming Senate debate on the budget bill will likely determine whether Washington can avert another fiscal showdown as the nation’s debt continues its upward trajectory.
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