US debt default will have serious impact on global economy, IMF warns
The International Monetary Fund (IMF) on Thursday warned the US of dire consequences if it defaults on its debt. The deadline for the US to raise or suspend its borrowing limit is fast approaching.
Will have a serious impact on the global economy
IMF Communications Director Julie Kojack urged everyone to resolve the matter immediately, saying, “Our assessment is that if the US debt defaults, it will have very serious consequences not only for the US, but also for the global economy. “
Biden agrees on budget cuts
Republicans and Democrats have different views on the debt limit. Republicans in Congress are pushing that President Joe Biden’s administration agree to significant budget cuts to remove the debt ceiling to pay for the nation’s current bills.
IMF warns America
The IMF on Thursday warned of higher borrowing costs, wider global volatility and the potential for economic repercussions in the event of a US default. “We’ve seen a world that has been hit by a number of aftershocks over the years, so we would like to avoid those severe consequences,” Kojack said.
When Republicans won a majority in the House of Representatives during last year’s midterm elections, the right wing of the caucus pushed Kevin McCarthy to tackle the US debt in exchange for his support, but the Biden administration refused to negotiate a debt ceiling, creating an impasse weeks before the US risks running out of money to pay its obligations.
US President Biden met with McCarthy on the issue earlier this week. After the talks ended, President Biden said, “Default is not an option,” while McCarthy told reporters that he saw no new activity at the meeting. Talks will resume on Friday as both sides seek to resolve the issue before the X-date, which the US Treasury recently warned could come as soon as June 1.
