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US debt ceiling crisis: IMF frustrated as negotiations enter “12th hour” | FULL

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International Monetary Fund (IMF) chief Kristalina Georgieva gave reassurances about the U.S. debt ceiling on Friday, saying that historical evidence showed that discussions “come to the brink and then a solution is found,” leading to the current “relative calm.” Georgieva noted that some niche markets have seen an impact on costs, but this was “not statistically significant.”

“Of course, it is frustrating for everyone to have a solvable problem, that is in the hands of policymakers, continue to linger into the 12th hour,” Georgieva said, suggesting that the U.S. debt ceiling could be replaced with an agreement that annual appropriations could be supported with borrowing.

The IMF said that U.S. interest rates will likely need to remain higher for longer to tame inflation, and Washington needs to tighten fiscal policy to bring down its federal debt. Georgieva also said that the IMF forecasts the federal funds rate will peak at 5.4 per cent in 2023, easing to 4.9 per cent in 2024.

President Joe Biden and House Speaker Kevin McCarthy continue to progress towards a deal on its debt ceiling. The two appeared to be nearing a deal to cut spending and raise the government’s $31.4 trillion debt ceiling, with little time to spare to head off the risk of default.

For more info, please go to https://globalnews.ca/news/9724258/us-debt-ceiling-possible-deal/

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Category
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Tags
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