FED : Possible shutdown in the US State

China and the United States of America are creating (like every October when big bankruptcies take place) the perfect storm.

The danger of a shutdown in the US State is now visible after the new refusal of the Republican senators to approve a bill for the extension of the debt limit; the US government can undertake that.

 As expected, if the Republicans block the process, the Democrats will be left with only three days to find a way to keep the State functioning beyond the time limit of Thursday (September 30), when the current funding expires.

In this context, two top Fed officials warned that the failure to raise the US debt ceiling would have catastrophic consequences.

In particular, John Williams, chairman of the Federal Reserve Bank of New York, said that the US Federal Reserve would not mitigate the impact of a public debt default.

Williams warned of the risk of investors becoming "extremely nervous," which could lead to an "extreme kind of reaction in the markets."

Federal Reserve Governor Lael Brainard also urged lawmakers to act, saying: "Congress knows what to do. But, unfortunately, he has done it again. It needs to be strengthened as a responsibility. "The American people have had a lot of drama in the last two years."

Start panic!

Earlier in the month, on Wednesday, September 8, 2021, US Treasury Secretary Janet Yellen made a shocking statement, warning in a letter to Congress that state coffers were in danger of running out of liquidity.

In particular, Janet Yellen warned that the US Treasury Department is in danger of running out of cash next month ( the famous October ) unless Congress raises its borrowing limit. 

Otherwise, according to President Joe Biden's government officials, debt default has many chances.

Addressing congressional leaders, the finance minister said she could not offer a "specific estimate" of when the cash would be depleted but that it was "most likely" that money would be "depleted" in October 2021.

This article is for informational purposes only and does not replace specialized consulting services with professional experts.

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