The only development that can be seen as positive from the talks between the White House and the Republicans and the current standoff over the amount of US debt will be if Congress decides to raise Washington’s borrowing limit. This statement was made by US Treasury Secretary Janet Yellen, who has repeatedly stressed that the superpower’s default would have devastating consequences not only for the American, but also for the global economy.

In an interview she gave to Bloomberg TV, the US minister emphasized that “the world’s markets, American households and businesses, first of all, must see that we have a Congress that is committed to paying the bills of the American state.” Speaking on the sidelines of the G7 finance ministers’ meeting in Niigata, Japan, Ms Yellen also warned that “if the US Congress doesn’t do this, it will really hurt our credit rating.”

Yellen has largely declined to elaborate on what the Treasury Department will do if Congress does not reach an agreement to raise or suspend the debt limit before it can cover all of the government’s obligations. US President Joe Biden and Speaker of the House Kevin McCarthy have postponed a debt ceiling meeting scheduled for Friday.

Biden and Republicans in Congress have been at odds for weeks on raising the $31.4 trillion borrowing limit. United States federal government dollars. Republican leaders typically cited an increase in the superpower’s debt and looked for promises of future spending cuts before approving a higher ceiling. Biden pushed for a “clean” increase, with budget talks remaining separate.

The standoff is being watched closely both in the US and around the world as politicians, businesses and households worry about the potential consequences of a US default.

Yellen reaffirmed her view that a potential default would be an “economic and financial disaster.” He said he had spoken to business executives in recent days to learn about their concerns, and stressed that “both Wall Street executives and American businessmen are expressing their concerns about the debt ceiling. We want to hear the voices of the people that will be affected.”

Ms. Yellen added that it is not yet clear when the Treasury Department will literally run out of funds to pay federal salaries, health care costs and benefits. However, he told Congress that the Treasury could be left without cash reserves as early as June 1. In an interview, the head of the Ministry of Finance also said that she intends to inform Congress, as this date is especially close.

The government hit the legal borrowing ceiling in January, and since then the Treasury has been using special accounting measures to free up cash.