Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Treasury could run out of money by June 5 without debt-ceiling deal: Yellen

Published 05/26/2023, 04:45 PM
© Reuters

Investing.com -- U.S. Treasury Secretary Janet Yellen warned Friday that the U.S. will run out of cash by June 5, should the government fail to raise the debt limit.

"Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government's obligations if Congress has not raised or suspended the debt limit by June 5," Yellen said in a letter on Friday to House Speaker Kevin McCarthy. 

Yellen previously touted June 1, or early June, as the so-called X-date, or the day the U.S. won’t be able to pay its bills.

The warning comes just a week before the U.S. Treasury is set to make more than $130 billion of scheduled payments in the first two days of June. The Treasury is also scheduled to make an estimated $92B of payments and transfers during the week of June 5, Yellen said, adding that its projected resources would be "inadequate to satisfy all of these obligations."

Republican and White House negotiators have made strides on Friday toward reaching a debt-ceiling agreement that reportedly would seek to raise the debt limit and cap federal spending for two years through 2024.

Should a deal be announced by late Friday or on Saturday (May 27), Goldman Sachs said it believes this would "likely allow a House vote late Tuesday (May 30) or Wednesday (May 31).”

The countdown to a deal is being closely watched as the latest data showed the U.S. Treasury had about $38.8B in cash on Thursday that it uses to pay its bills, compared with an average balance of about $500B on hand.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.