The US is on the verge of bankruptcy. One week left to break the deadlock

The US is getting more and more nervous. Politicians fail to agree on an increase in the level of debt of public finances, which can have very serious consequences.

US on the brink of bankruptcy

The situation in the American economy is becoming more and more difficult. On January 19, the debt limit allowed by law was exceeded, after which it is impossible to raise funds using debt instruments. The amount in question is $31.4 trillion, or about 120 percent. annual income to the US budget.

The impasse continues, and new summits are being called at the White House.

One week left for politicians

The case is becoming increasingly problematic as June 1 is the deadline for increasing the debt. If this does not happen, the Ministry of Finance will lose the opportunity not only to issue new debt securities, but also to redeem bonds. Technically, this would mean bankruptcy.

Analysts say that each day of the stalemate will increase uncertainty on the New York Stock Exchange, and this could lead to unexpected moves among investors. Economists argue that this would be tantamount to having to raise interest rates and thus almost certainly a recession.

Top-level talks continue

Joe Biden again invited a representative of the Republican Party to the White House. On Wednesday, May 24, the President tried to persuade Kevin McCarthy to make concessions and unblock the necessary regulations.

To meet the June 1 deadline, the parties must reach an agreement by the middle of this week, officials said. So there is very little time left. It may come as a surprise that Treasury Secretary Janet Yellen spoke of the gravity of the situation earlier in the year.