Yellen Warns Of Catastrophe If Debt Ceiling Impasse Continues: 'Need To See ... Congress Committed To Paying Bills'

Treasury Secretary Janet Yellen reiterated her concerns about a potential default by the U.S. and said the deadline when the Treasury will run out of funds isn't certain yet.

What Happened: "What global markets and American households and businesses need to see is that we have a Congress that is committed to paying the bills," said Yellen in an interview with Bloomberg, on the sidelines of the meeting of the finance officials from the G-7 nations being held in Japan.

A failure by Congress to raise the debt ceiling will likely "impair our credit rating," she said.

A default would be an economic and financial catastrophic, repeating a view that she said last weekend.

Timing Uncertain: While Yellen previously gave a deadline as early as June 1 for the Treasury running out of funds, she reportedly said in Japan that the timing was still unclear.

She stated that she would update Congress as the date approaches.

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Yellen also hinted at a meeting with American business people and Wall Street executives as they have always expressed concerns about the debt ceiling.

"We want to hear the voices of people who will be affected by this," she said.

Why It's Important: President Joe Biden is at odds with Republican lawmakers over the modality of lifting the debt ceiling. The latter have clamored for spending cuts as part of the bill to raise the limit.

A New York Times report said earlier this week that the president's signal that he was amenable to drawing out unused COVID-19 funding and that he is open to using the 14^th Amendment show that he could he leaning toward reaching an agreement with GOP members.

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