US Treasury Secretary Janet Yellen today called on Congress to raise the federal government’s borrowing limit and avoid an unprecedented default scenario, which would trigger a global economic recession and risk undermining US leadership in the global economy.

Yellen made the warning in remarks she has prepared for a press conference she will give shortly before meeting in Japan with her Group of 7 (G7) counterparts, as well as India, Indonesia and Brazil.

“A payment freeze will threaten the gains we have worked so hard for over the past few years in our post-pandemic recovery. And it will cause a global recession which will take us even further back,” he stressed. “It also risks undermining US leadership in the global economy and raising questions about our ability to defend our national security interests,” the US secretary added.

US President Joe Biden said on Wednesday that if Congress fails to act before the federal government runs out of money – which could happen as early as June 1 – the US economy will be at risk of a recession.

Yellen stressed that Republicans’ political games on the issue amounted to “a crisis of our own making” and that the mere threat of a default could lead to a downgrade of the US government, as it did during the dispute. of 2011 on the federal borrowing limit.

At the same time, it may raise interest rates on mortgages, credit cards and car loans, Yellen noted.

Biden insists that Congress has a constitutional duty to raise the borrowing limit, which already stands at $31.4 trillion. dollars (28.6 trillion euros), without conditions. But Republicans, who control the House of Representatives, are linking this increase to major cuts in public spending.

Moreover Former US President Donald Trump urged Republicans on Wednesday to trigger a defaultunless they secure “huge” cuts in public spending from the Biden administration.