The International Monetary Fund (IMF) warned on Thursday that a US federal government default would have a “major impact” on the global economy.

“We again call on all parties to sit down at the table together, reach consensus and resolve the issue as quickly as possible,” Julie Kozak, spokeswoman for the international financial institution, said at a press conference in Washington.

Democrats and Republicans have been squabbling lately over raising the U.S. debt ceiling, a Congressional decision absolutely necessary if the world’s largest economy can pay its bills, its workers, and its creditors.

The amount that the federal government can borrow ($31.4 trillion) has already been covered, and the Democratic administration is tackling the problem with various maneuvers. Republicans are demanding drastic cuts in public spending in order to agree to an increase, and US President Joe Biden has so far dismissed the connection of the two issues, but says he is ready to discuss fiscal policy.

The meeting of the head of state with Congress leaders scheduled for Friday has been postponed to next week. The two opposing sides gave completely opposite interpretations of the development of events.

In the event that this much-discussed “limit” is not raised by Congress, Mr. Biden’s Treasury Secretary Janet Yellen warns that the country could be forced to default on June 1, which is unprecedented.

Meeting with bankers

Ms. Yellen will discuss the current political impasse with board members of the Banking Policy Institute, which lobbies for the banking industry, next week, a department spokesman told Reuters.

Ms. Yellen’s meeting with bankers, including JP Morgan chief executive Jamie Dimon and Citigroup’s Jane Fraser, was first reported by the news site Politico.

Source: RES-IPE