While officials of the Federal Reserve have sparred over whether the U.S. central bank should continue full-bore with its massive bond-buying stimulus, two Fed officials with differing policy views agreed on Thursday that a national debt default could have devastating effects.
Budget gridlock at the U.S. Congress led to an October 1 partial government shutdown that threatens to hurt economic growth and has already delayed the release of key economic data such as the September jobs report. Lawmakers are now locked in debate over how to raise the government’s borrowing limit and avoid a U.S. debt default on October 17.
John Williams, the president of the San Francisco Fed and a policy centrist, on Thursday said politicians in Washington are playing a “very, very dangerous game” with their brinkmanship, and said the failure of the government to pay its bills could undermine world confidence in the U.S. dollar, and in the extreme could cause a global financial panic.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at firstname.lastname@example.org. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.