Rhys Adams

Yellen Says U.S. Will Hit the Debt Limit Soon. This Is What’s at Stake.

Treasury Secretary Janet Yellen told U.S. lawmakers the federal government was projected to reach its debt limit next Thursday, marking a starting point for what is likely to be a long and tense battle in a divided government.

It’s up to Congress to lift the cap on borrowing, but the necessary votes to do so won’t come without plenty of political brinkmanship. Failure to address the debt limit would result in the U.S. defaulting on its sovereign borrowing, with unpredictable and severe economic consequences. But investors largely shrugged off Yellen’s warning.