Janet Yellen is ‘bluffing’ about the government running out of money by early June, economist Danielle DiMartino Booth says
Zinya Salfiti
May 16, 2023, 11:55 AM EDT
- Danielle DiMartino Booth said Janet Yellen is ‘bluffing’ about the date by which the US government could run out of money.
- “The X-date is not in June,” the economist and former advisor at the Dallas Fed said in a tweet.
- Yellen has said the Treasury may find itself unable to meet payments as early as June 1 if the debt limit isn’t raised.
Janet Yellen was ‘bluffing’ when she said the US government could be out of money and unable pay its debts by June 1 if Congress doesn’t agree to raise the federal borrowing limit, according to economist Danielle DiMartino Booth.
The so-called X-date – when the Treasury will be out of cash – is further away that Yellen suggests, and will likely come only after June, according to the CEO and chief strategist at Quill Intelligence, who was a former advisor at the Dallas Fed.
“The X-date is not in June. Yellen is bluffing (which is her J.O.B),” DiMartino Booth said in a tweet on Tuesday. She was responding to an analysis by another Twitter user, who projected the date to most likely come after June.
Yellen has repeatedly urged lawmakers to act on the borrowing limit – and warned that failing to raise the debt ceiling in time could result in a “catastrophe” for the US economy. She reiterated that concern in a new letter to House Speaker Kevin McCarthy Monday.
“With additional information now available, I am writing to note that we still estimate that Treasury will likely no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1,” Yellen said in the letter.
“The actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates,” the Treasury Secretary said, adding that these estimates are based on data, federal receipts, and outlays that could vary from the debt.
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Hours before Yellen renewed her warning to McCarthy, the speaker was nowhere close to confident with the way the negotiations have been progressing. “It doesn’t seem to me yet they want a deal, it just seems like they want to look like they are in a meeting but they aren’t talking anything serious,” McCarthy said.
Last week, the nonpartisan Congressional Budget Office projected that there is “significant risk” the US could default in the first two weeks of June if the debt ceiling is not raised by then. Meanwhile, Mark Zandi, the chief economist at Moody’s Analytics, previously told Insider that his projected X-date falls on June 8, with a best-case scenario of August 8.
Source: Business Insider
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