«We should never question the credit worthiness of the United States government,» Jamie Dimon told CNBC. «That is sacrosanct. It should never happen.»
The US hit the $31.4 trillion debt limit set by Congress on Thursday, forcing the Treasury to take «extraordinary measures» to stay out of default and putting pressure on lawmakers to raise the ceiling.
Those measures will last until early June, and Treasury Secretary Janet Yellen warned Congress that «Failure to meet the government’s obligations would cause irreparable harm to the US economy, the livelihoods of all Americans, and global financial stability.»
But while previous political standoffs over the debt limit have eventually resulted in a deal, Wall Street heavyweights have been sounding the alarm on the risk of default in a now-divided Congress with Republicans narrowly controlling the House of Representatives.
Republicans want an agreement to include spending cuts, while the Biden administration remains steadfast against putting any conditions on raising the debt ceiling.
Political dysfunction was a factor when Standard & Poor’s downgraded US debt in 2011, and the GOP’s prolonged battle to agree on a House speaker this month underscored the likely difficulty in reaching a new debt deal.
