ECB Chief Lagarde Confident US Won't Default On Debt: 'Higher Interest Of Nation Has To Prevail'

European Central Bank President Christine Lagarde said she has huge confidence in the United States and believes the government will not default on its debt.

"I just cannot believe that they would let such a major, major disaster happen of the United States defaulting on its debt. This is not possible. I cannot believe that it would happen. But if it did happen, it would have a very, very negative impact, not just for this country where confidence would be challenged, but around the world," she told CBS in an interview.

Lagarde said the U.S. is a major leader in economic growth around the world and it cannot let the default happen. "I understand the politics, I have been in politics myself. But there is a time when the higher interest of a nation has to prevail," she said.

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House Speaker Kevin McCarthy in a Monday speech at the New York Stock Exchange will talk about the conditions that Republicans want Democrats to agree to in exchange for progress on the debt ceiling, reported Reuters.

Republicans have proposed holding annual spending growth to 1% for a decade, trimming regulation, and increasing energy production, the report said.

Polarization: On being asked about the increasing political pressure on certain political capitals to choose between the United States and China, Lagarde said it would lead to the economic downside.

"Is the global economy going to be affected by one or X percent? There are multiple forecasts, all of them are negative. So the decoupling and the sort of bi-polarization of the world would lead to less economic growth, less prosperity in the world, more poverty across the world," she said.

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