Yellen Warns of Imminent U.S. Debt Ceiling Risk

U.S. Treasury Secretary Janet Yellen has warned that the country could hit its debt ceiling between January 14 and January 23, 2024, necessitating 'extraordinary measures' to prevent a default. These measures are temporary accounting maneuvers that allow the government to continue operations despite reaching borrowing limits. The debt ceiling, which restricts the amount the Treasury can borrow, was suspended until January 1, 2025, but without a raise or suspension, default could affect federal programs and the U.S.'s creditworthiness. Yellen urged Congress to act swiftly to protect the nation's financial standing, amid ongoing political debates, particularly as President-elect Donald Trump has advocated for the elimination of the debt ceiling. The Fiscal Responsibility Act of 2023, signed by President Joe Biden, suspended the borrowing limit but did not include Trump's demands, intensifying partisan discussions. A temporary decrease in debt is expected due to planned financial activities, but this will not alleviate the impending ceiling issue.