Yellen Panicking Over Debt Ceiling 😬

GM and BRRR.

Treasury Secretary Janet Yellen issues a dire warning about the debt ceiling and the broader economy as she urges Congress to take action in order to prevent severe disruptions and potential economic downturns. She projects that the US will reach the debt limit on June 1st.

A US default would cause “widespread suffering”, and “an economic and financial catastrophe”, per Yellen.

Maybe the uniparty should have considered the debt when they grew the federal budget by ~50% since 2018, pushing us further in debt.

The national debt now sits at $31T, tripling from 2011 levels.

This is a critical reason we remain staunchly bearish the US Dollar, as the only way out of the debt is to inflate it away.

Elsewhere, rising debt among the average US consumer via credit cards now hits decade-high levels per a Monday report, with fewer consumers paying off holiday spending than usual. This data combined with high rates and inflation indicates gloomy days ahead for American consumers.
 
Here’s what we brrr’d today:

• Yellen's Stark Forecast: Debt Ceiling Impasse Threatens Economic Collapse

• Credit Card Conundrum: Balances Defy Expectations, Households Feel the Pinch

Yellen's Stark Forecast: Debt Ceiling Impasse Threatens Economy

• Yellen about the Debt Ceiling: Treasury Secretary Janet Yellen issues a dire warning about the debt ceiling, reaffirming the June 1 X-date and stressing the need for immediate congressional action. Also warns that a default would generate an economic and financial catastrophe, undoing progress made since the pandemic.

• Biden & Leaders talk again: Pres. Biden is scheduled to meet with congressional leaders aimed at reaching a deal before the federal government runs out of money. Previous meeting showed little progress.

• Urgent Need to Lift the Debt Ceiling: Failure to raise the limit would halt government payments to Social Security beneficiaries, veterans, and military families. Yellen emphasizes that the crisis can be averted by raising the debt ceiling without authorizing new spending.

• The Consequences of Default: Could result in 8 million job losses, a 45% drop in the stock market, and $10 trillion in household wealth evaporated, according to Yellen. Essential government services, i.e. air traffic control, law enforcement, and food safety, would be disrupted. Investors already showing reluctance to hold government debt with impending default risks.
  CNBC

  

  madlads

Credit Card Conundrum: Balances Defy Expectations, Households Feel the Pinch

• Mounting Debt: US households accumulate $148 billion in debt, bringing the total to a staggering $17.05 trillion, $2.9 trillion higher than before the pandemic, according to a report released by the Federal Reserve Bank of New York on Monday.

• US Households Relying on Credit: Credit card balances remain flat at $986 billion in Q1, defying the usual decline after the holidays, while delinquency rates increase for various loan types.

• Balances Remain Unchanged in Q1: Credit card balances, typically reduced in Q1, hold steady at $986 billion, hinting at households' reliance on credit cards amidst rising prices.

• Delinquencies on the Rise: Although the overall delinquency rate stands at a low 2.6%, the proportion of debt that becomes delinquent after 30 days rises for credit cards, auto debt, and other loans.

• Mortgage Trends Shift: Mortgage originations plummet to $324 billion in Q1, the lowest since 2014, while balances on home equity lines of credit increase for the fourth consecutive quarter after a decline lasting nearly 13 years.

  Fortune

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