Wednesday, November 13

Currency, Debt, National Budgets & Interest Rates

U.S. Treasury Breaches $28.9 Trillion Debt Limit
30Nov By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief

U.S. Treasury Breaches $28.9 Trillion Debt Limit

Treasury Secretary Yellen Says Uncertainty Exists Over Cash Balance On Dec. 15 November 30, 2021—The U.S. government breached its $28.9 trillion debt limit and is using extraordinary measures to borrow money to pay its bills, the Congressional Budget Office reported today. The CBO outlined the extraordinary measures the government is currently taking to stay afloat. The U.S. government has "no room to borrow under its standard operating procedures," the CBO said. If the Treasury transfers $118 billion to the Highway Trust Fund on December 15, as the recently passed Infrastructure Investment and Jobs Act directs it to do, it is likely to run out of cash. Running on Empty If the U.S. government runs out of options, it "would ultimately lead to delays of payments for some governme...
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Fed Comes Under Pressure As Inflation Persists
30Nov By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief, Types of News: Videos

Fed Comes Under Pressure As Inflation Persists

Fed Chair Says Inflation Now Likely To 'Linger Well Into Next Year' November 30, 2021—After months of downplaying inflation as a temporary condition, U.S. Federal Reserve Board Chair Jerome Powell said inflation has now spread much more widely beyond the sectors impacted by supply chain bottlenecks. 'Transitory' No More "I think it's probably a good time to retire that word and explain what we mean," Powell told senators at a Banking Committee hearing. Surging Economic Growth The U.S. economy is now growing at 5 percent, which is the "fastest pace in many years," Powell said. Meanwhile, the unemployment rate is down to 4.6 percent. Asked by Sen. Jack Reed, D-R.I., about the drop in the U.S. labor participation rate, Powell said fears about the pandemic are the likely cause. ...
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Congress Bides Time On Its Debt And Its Legal Limit
14Oct By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Types of News: Analysis, United States

Congress Bides Time On Its Debt And Its Legal Limit

The House approved an increase of $480 billion to the national debt limit, giving the U.S. Treasury more time to legally pay its bills. At What Point Will U.S. Debt And Deficits Break The Mighty Dollar? October 14, 2021—After much trepidation by global bankers watching lawmakers in Washington, D.C. toss responsibility of the nation's debt back-and-forth, Congress passed legislation this week giving the world's market watchers a sigh of relief. Catastrophe can wait until another day. Today, the bill became law. Specifically, Congress added $480 billion to the previous U.S. national debt limit of $22 trillion. It's estimated that provides enough cash for the U.S. Treasury to continue paying salaries of government workers and military, bills for daily operations, providing entitlemen...
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‘Debt Doesn’t Matter,’ Treasury Secretary Yellen Tells Senate Committee
28Sep By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Finance, Investing, Global Economics, Types of News: Brief, United States

‘Debt Doesn’t Matter,’ Treasury Secretary Yellen Tells Senate Committee

September 28, 2021—It's been 20 years since Vice President Dick Cheney asserted to the world and the U.S. Congress that "deficits don't matter." Today, Treasury Secretary Janet Yellen asserted a similar sentiment when asked about the overall size of the debt. In an exchange with Sen. Mike Rounds, R-SD, Yellen said it is the interest cost of the debt, which is virtually zero, is all that matters. "When do we have to say, 'Enough is enough' when it comes to our deficit and our debt?" Rounds asked. Yellen responded that "there are different metrics" for looking at the level of debt. One is the debt-to-GDP ratio. "We are a little bit over 100 percent," she added, "which has traditionally been regarded as high." But rather than use that metric to examine the debt level, Yellen s...
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Fed Official Warns About Global Impact of U.S. Not Raising Debt Limit
27Sep By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Types of News: Brief

Fed Official Warns About Global Impact of U.S. Not Raising Debt Limit

September 27, 2021--As the U.S. Senate got ready to vote on a resolution to fund the government and raise the breeched debt limit, officials from the Federal Reserve warned about dire consequences that could take place if the Treasury runs out of cash. John Williams, president of the Federal Reserve Bank of New York, warned about an "extreme kind of reaction in the markets" if the U.S. Congress would raise the current debt limit. The limit of $22 trillion is well below the current debt of $28 trillion, the GER reported in July. He said the U.S. Treasury market is at the center of the global financial system. If it stops functioning due to running out of cash, the global economy will feel it. "If you actually crossed that line and got to a place where the government wasn't paying off ...
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U.S. Treasury Secretary Warns — Again — About Breach Of Debt Limit
9Sep By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Types of News: Brief, United States

U.S. Treasury Secretary Warns — Again — About Breach Of Debt Limit

Photo by Alexander Schimmeck, courtesy Unsplash U.S. Government Likely to Run Out Of Cash By October Without Act of Congress September 9, 2021--U.S. Treasury Secretary Janet Yellen wrote another letter to leaders of Congress yesterday, pleading for lawmakers to authorize a higher level of government spending than the $28.7 trillion currently owed. Having breached the last debt limit long ago, Treasury is relying on extraordinary measures, such as suspension of making payments to certain disability and benefits funds and thrift savings plans, to pay its bills. Like Yellen's last letter in July, the Sept. 8 letter does not mention the amount of the current U.S. debt. Neither does it mention that the U.S. government surpassed the last debt limit of $22 trillion long ago. Congre...
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U.S. Cites Currency Manipulation As Source of Trade Subsidy in Twist-Tie Case
25Nov By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Trade, Types of News: Brief

U.S. Cites Currency Manipulation As Source of Trade Subsidy in Twist-Tie Case

November 25, 2020--For the first time in an investigation of a trade subsidy, the U.S. Commerce Department identified China's undervalued currency as a state subsidy warranting a financial penalty at the U.S. border. On Tuesday, the department announced it is asking the U.S. Customs and Border Control to begin collecting cash deposits at a rate of 122.5 percent from importers of Chinese twist ties. The rate reflects the total amount of subsidies U.S. officials estimate Chinese twist tie exporters receive from their government. Next Steps Commerce Secretary Wilbur Ross. said the department would "continue to use the legal tools at our disposal to aggressively counter currency undervaluation and other unfair subsidies, further ensuring a level playing field for American businesses a...
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U.S.Treasury Looks to End Some COVID-19 Related Lending Relief Programs
20Nov By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Types of News: Brief

U.S.Treasury Looks to End Some COVID-19 Related Lending Relief Programs

Nov. 20, 2020--Indicating confidence that the U.S. economy has weathered the worst of the COVID-19 shock, the U.S. Treasury is planning to allow five emergency lending facilities to expire at the end of 2020. Private Banks Are 'Capable of Lending ' Treasury Secretary Steven Mnuchin said some lending-relief programs enacted in the wake of the COVID-19 pandemic should continue while others are no longer needed. In a letter to the Federal Reserve, Mnuchin said that the emergency lending facilities the government provided in 2020 have "clearly achieved their objective" and that banks are now capable of meeting the borrowing needs of corporate, municipal and nonprofit clients. Congress approved the programs in the CARES Act last March to mitigate the economic impact of the global pa...
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18Nov By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief

Global Debt Surging in 2020

Nov. 18, 2020--Governments and companies took on an unprecedented level of debt in the first nine months of this year. The total debt rose $15 trillion above 2019, much of it related to the impact the global pandemic, according to the Institute of International Finance. For perspective, the association estimates that global debt may swell to $277 trillion by the end of 2020. As a share of the global economy, that is 365 percent of GDP, up from 320 percent of GDP in 2019. Debt Crisis Worse in Poorest, Middle-Income Countries The news follows a separate report by the International Monetary Fund about extreme debt distress in emerging and developing economies. "For some, a crisis is imminent," the IMF report said. "For many more, only exceptionally low global interest rates may b...
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17Nov By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Types of News: Brief

US Economy Has ‘Long Way to Go,’ Says Fed Chair

Nov. 17, 2020-Despite recent optimism about the prospects for an economic recovery in the United States, the COVID-19 pandemic still poses a significant threat to the economy, Federal Reserve Board Chairman Jerome Powell warned on Tuesday. "We are not going back to the same economy," Powell said. Fed Chair Jerome Powell tapers enthusiasm on the economy. See video by Mohr Media. In a video call with the Bay Area Business Council, Powell said that even under the best-case scenario with a vaccine distribution, the effect of the virus is likely to have a significant impact on the near-term economy. News from biotech firm Moderna yesterday and pharmaceutical Pfizer last week that their vaccine trials are succeeding boosted enthusiasm among market-watchers for a quick economic reco...
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