Finance

Yellen says Delta slowing recovery, urges Congress to raise U.S. debt limit-testimony

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U.S. Treasury Secretary Janet Yellen testifies earlier than the Senate Appropriations Subcommittee on Monetary Providers concerning the FY22 Treasury finances request on Capitol Hill, in Washington, DC, U.S., June 23, 2021. Shawn Thew/Pool by way of REUTERS

WASHINGTON, Sept 28 (Reuters) – U.S. Treasury Secretary Janet Yellen instructed senators on Tuesday that the US ought to return to full employment subsequent yr regardless of headwinds from the coronavirus Delta variant and once more urged Congress to shortly elevate the federal debt restrict.

In ready remarks to a Senate Banking Committee listening to, Yellen mentioned the restoration from a COVID-19 pandemic-induced recession stays “fragile however fast.”

“Whereas our economic system continues to increase and recapture a considerable share of the roles misplaced throughout 2020, important challenges from the Delta variant proceed to suppress the pace of the restoration and current substantial limitations to a vibrant economic system,” Yellen mentioned.

“Nonetheless, I stay optimistic concerning the medium-term trajectory of our economic system, and I count on we’ll return to full employment subsequent yr.”

Yellen, who’s testifying about COVID-19 reduction assist efforts, mentioned that the Emergency Rental Help program was scaling up shortly to forestall evictions, with 1.4 million funds made to renters and landlords.

However she added that “an excessive amount of of the cash stays bottlenecked on the state and native ranges” and that these jurisdictions should work to take away limitations to help.

Yellen additionally repeated {that a} debt default triggered by Congress’ failure to elevate a the federal debt restrict would impair the total religion and credit score of the US “and our nation would probably face a monetary disaster and financial recession.

She mentioned that she nonetheless hoped that the debt restrict may very well be raised on a bipartisan foundation. U.S. Senate Republicans blocked a debt restrict and authorities funding measure late on Monday.

Reporting by David Lawder, Modifying by Nick Zieminski

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