Yellen Warns Of 'Unthinkable' U.S. Default Risk In August Without Debt Limit Hike

• S. Treasury Secretary Janet Yellen on Wednesday warned Congress that the United States risks a debt default and a new financial crisis as soon as August if lawmakers fail to act quickly to suspend or raise the federal borrowing limit. 
• In testimony to a Senate Appropriations subcommittee, Yellen said defaulting on U.S. debt obligations would be "unthinkable" and "would have absolutely catastrophic economic consequences." 
• Yellen said that to avoid uncertainty for financial markets, Congress should pass new debt limit legislation - allowing the Treasury to continue borrowing - before the latest suspension expires on July 31. 
• A first-ever default on U.S. government debt obligations "would precipitate a financial crisis, it would threaten the jobs and savings of Americans at a time when we're still recovering from the COVID pandemic," Yellen said.

(Source: Reuters)