Loading ...parts: With payments due on U.S. Treasury securities (which the Treasury issues to finance the government), the Treasury resorted to its cash reserves and “extraordinary measures” to pay the bills. Once those emergency tools are exhausted, the Treasury says it will fail to make its payments, risking an outright default.
Yellen told the Senate Banking Committee that default could disrupt the market for U.S. Treasuries, seen as one of the most liquid markets in the world.
Yellen appeared in front of the Senate Banking Committee alongside Fed Chairman Jerome Powell, who agreed that a government default would be disastrous.
“The potential effects could be severe,” Powell said Tuesday
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