Treasury Secretary Janet Yellen said that the government could become unable to pay bills on time by June 1. In that case, the Treasury Department could halt payments, such as to federal employees or veterans.
In a worst-case scenario, a failure to pay holders of U.S. government debt, a linchpin of the global financial system, could trigger severe recession and send stock prices plummeting and borrowing costs soaring.
Many economists don’t expect a default for the first time in U.S. history. But they outline three potential ways the standoff could affect the economy and financial system, ranging from not great to extremely scary.
U.S. lawmakers might have just days to act before the standoff over the debt ceiling reverberates through the economy https://t.co/JM1UfZ7HfW
— Real Time Economics (@WSJecon) May 22, 2023