The US is expected to reach the federal borrowing limit around mid-January, Treasury Secretary Janet Yellen warned on Friday, calling on Congress to take action “to protect” the “credibility” and “faith” of the government of the world’s largest economy. .

US lawmakers suspended the so-called debt ceiling — the limit the federal government can borrow to cover current spending — until Jan. 1, 2025.

On January 2, a new limit is expected to be decided, which will correspond to the amount of debt that can be issued by the Ministry of Finance.

But the road ahead could prove contentious if the US reaches the new debt ceiling, as the thorny issue fuels perennial political tensions that have escalated in recent years.

“The Treasury currently expects to reach the new (debt) limit between January 14th and January 23rd, when it will become necessary to begin taking emergency action,” Ms. Yellen noted in a letter to the Republican House Speaker Mike Johnson and other members of Congress.

These emergency measures will allow the finance ministry to continue financing the government’s operations, avoiding delays in paying its debts.

According to the minister, the US will not immediately reach the limit as soon as its suspension ends on January 2, as the country’s debt is expected to decrease by about $54 billion, thanks to the repayment of bonds.

The US Congress has raised or suspended this so-called ceiling more than a hundred times so that the government can meet its public spending obligations.

But the American right generally opposes raising the federal government’s massive borrowing limit — it currently exceeds $36 trillion — and several Republicans have never voted for it.

But if the borrowing ceiling is not raised or suspended before the Treasury exhausts its available tools, the government risks defaulting on payments, which would have major consequences for the world’s largest economy.