Bank of America is bracing for a potential US debt default, says chief executive Brian Moynihan. He is not in favor of completely eliminating the debt ceiling as some lawmakers have proposed. Meanwhile, Treasury Secretary Janet Yellen says that “all responsible members of Congress must agree to raise the debt ceiling.”
Bank of America CEO Brian Moynihan on the possible US debt default.
Bank of America CEO Brian Moynihan discussed the possibility of the US defaulting on its debt in an interview with CNN on Monday, as Congress is in conflict over raising the debt ceiling again.
While emphasizing that he hopes lawmakers will resolve their problems, the Bank of America executive warned that the country’s debt default remains a possibility that cannot be ignored. He was quoted as saying:
We have to be prepared for that, not only in this country, but in other countries around the world… You hope it doesn’t happen, but hope is not a strategy, so be prepared for it.
Several lawmakers have proposed legislation that would remove the US debt ceiling altogether. Moynihan is not a fan of the idea. Asked if the US should remove its debt ceiling, the Bank of America chief said: “There has to be an argument about how we make sure we live within our means as a country… I think we should just leave it at peace and make sure it works correctly.”
However, he admitted that the US government had to take on “a lot of debt in the last two years to overcome the drag of the pandemic on the economy.” Moynihan added that Bank of America is still predicting a “mild recession” at some point in the future.
Janet Yellen urges Congress to raise the US debt ceiling.
Treasury Secretary Janet Yellen warned Monday that the US government risks “economic and financial catastrophe” if Congress does not pass a bill to increase the debt limit to $31.4 trillion. She said in an interview with ABC on Monday:
The United States has paid all its bills on time since 1789, and failure to do so would result in economic and financial catastrophe… And every responsible member of Congress must agree to raise the debt ceiling.
The Treasury Secretary believes that the US economy is not going to fall into recession. “Last month we created more than 500,000 jobs, more than 12 million since the president took office, and inflation is coming down,” he said.
What do you think of Bank of America CEO Brian Moynihan’s remarks and Treasury Secretary Janet Yellen’s debt ceiling warning? Let us know in the comments section.
image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
