Conflict between Republicans and Democrats over federal debt ceiling increase
[서울=뉴시스]Reporter Lee Jae-joon = Former U.S. Treasury Secretary Lawrence Summers said on the 26th (local time) that the probability of the U.S. failing to raise the federal debt ceiling is only 2 to 3 percent.
According to CNBC and CNN, former Treasury Secretary Summers attended the Morningstar Investment Conference held in Chicago on the same day and emphasized that even if the United States goes into default, it can be resolved immediately and escaped.
“There is only a 2% or 3% chance of a technical default on federal debt payments over the next few months, and even if that happens, it will rebound fairly quickly,” Summers reiterated.
In addition, former Secretary Summers predicted that the possibility of default due to debt surplus is even smaller, saying, “The probability of default over the next 10 years due to debt surplus and creditors not being paid for a certain period is less than 2%, unless a major war breaks out. only,” he observed.
As Republicans and Democrats confront each other after raising the debt ceiling, fears that the ceiling will be reached at $31.4 trillion earlier than expected have grown, affecting the short-term financial market.
JPMorgan warned last week that a technical default in US Treasuries is a major risk, predicting that reaching the US federal debt ceiling would be a problem as early as May.
House Speaker Kevin McCarthy announced that he would put to a vote a bill to raise the federal debt ceiling and reduce spending by $31.4 trillion.
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