Treasury could run out of money by June 5 without debt-ceiling deal: Yellen
2023.05.26 16:55
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Investing.com — U.S. Treasury Secretary Janet Yellen warned that the U.S. will run out of cash by June 5, should the government fail to raise the debt limit.
“Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5,” Yellen said in a letter to House Speaker Kevin McCarthy.
Yellen has previously touted June 1, or early June, as the so-called X-date, or the day the U.S. won’t be able to pay its bills.
The warning comes just a week before the U.S. Treasury is set to make more than $130 billion of scheduled payments in the first two days of June. The Treasury is also scheduled to make an estimated $92B of payments and transfers during the week of June 5, Yellen said, adding that its projected resources would be “inadequate to satisfy all of these obligations.”
Republican and White House negotiators have made strides on Friday toward reaching a debt-ceiling agreement that reportedly would seek to raise the debt limit and cap federal spending for two years through 2024.
Should a deal be announced by late Friday or on Saturday (May 27), Goldman Sachs said it believes this would “likely allow a House vote late Tuesday (May 30) or Wednesday (May 31).”
The countdown to a deal is being closely watched as the latest data showed the U.S. Treasury had about $38.8B in cash on Thursday that it uses to pay its bills, compared with an average balance of about $500B on hand.
