October 16, 2021

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CEO JP Morgan: "US Debt Failure Scene Possible Disaster"

CEO JP Morgan: “US Debt Failure Scene Possible Disaster”

Jamie Dimon, president and CEO of Jamie Morgan Chase, says his company is preparing for the fact that the United States will not be able to repay its debt. He described the situation as “potentially catastrophic” – but said he hoped lawmakers would find a way to resolve the crisis. Business Insider.

Why is this important?

Treasury Secretary Janet Yellen recently warned the financial media that the U.S. Treasury is exhausted. Since then, the federal government can no longer pay its fees. The almost empty treasury is associated with the U.S. debt ceiling system. When that is achieved, the Congress treasury will not have to pay any new debt.

This is the third time we have done this (Get ready for the US default, Version) to do. This is a catastrophic event, “he told Reuters during a conversation ahead of a ribbon-cutting ceremony at one of his bank’s new locations in Washington.

The chief executive told Reuters that such a decision would affect the repo and money markets. As well as how credit rating agencies respond. His bank began to make deals with customers, a process that requires significant evidence.

“You have to try and check the deals to predict. If I remember correctly, when we were finally ready for this, it would cost us $ 100 million,” he said.

Debt ceiling

Timon said he supports a cross-party bill to completely abolish the debt ceiling.

“Every time This (A default on US debt, Version) is coming, it is resolved, but we should not get too close to it, ”he said. “I think this whole thing is wrong. One day we will have a cross-party bill repealing the debt ceiling. It’s all political.”

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Republicans in the U.S. Senate on Monday night rejected a bill raising the debt ceiling and passing it in the Lok Sabha. Government strike Would have prevented.

Meanwhile, Democrats are rushing to raise the government’s $ 28.4 trillion debt ceiling. They have until October 18 to do so.

Treasury Secretary Janet Yellen reiterated the call for bilateralism. Democrats told lawmakers he would try to settle extraordinary measures if Congress failed to act by that date to raise or suspend the credit limit.

Care

While analysts are optimistic that the crisis will be averted, some, including the CIO of the Independent Adviser Coalition, Chris Sackerelli, have expressed concern. Inside.

“Most likely, Congress will raise the debt ceiling by the weekend or use the extraordinary measures of the Federal Reserve to intervene,” he said via email. “However, the fact that Republicans will not go with Democrats to approve the debt ceiling increase is an indication of inactivity.”

The debt ceiling has been a dispute between the two parties since the government introduced it in 1917 to encourage low borrowing. Congress has the power to raise or lower that debt ceiling, which has occurred nearly eighty times in history.

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(jvdh)