- The federal government’s bank account saw a sharp drop in cash as the default deadline loomed.
- The Treasury General Account held $87.4 billion on Monday, up from $140 billion on Friday.
- Treasury Secretary Janet Yellen reaffirmed this week that the government could run out of money as early as June 1.
The Treasury Department’s bank account at the Federal Reserve saw a sharp decline in cash earlier this week as lawmakers continued negotiations to lift the debt ceiling.
According to the latest update, the Treasury General Account held $87.4 billion on Monday, up from $140 billion on Friday.
That brings the cash balance to its lowest level since April 12, before tax payments to the IRS begin filling Treasury coffers. The fall in cash is also the biggest since March 1.
The Treasury General Account is used to pay for debt service on government bonds – preventing America from defaulting – among myriad other outlays such as federal employee salaries.
While the government’s bank account will see more tax payments through June 15, the sudden drop raises the risk that the Treasury Department may not have enough time to set up a potential default.
On Monday, Treasury Secretary Janet Yellen reaffirmed her warning that the government could run out of money by June 1.
Meanwhile, lawmakers continue talks on raising the debt ceiling, with some signs that Republicans in Congress and President Joe Biden are making progress.
On Tuesday, Speaker of the House Kevin McCarthy said it was possible to reach a debt agreement by the end of the week. And on Wednesday, he told CNBC that “we now have a structure in place to find a way to come to a conclusion. I think at the end of the day we don’t have a loan default. I think we’ll ultimately have to get the president to agree.” Had to negotiate.”
For his part, Biden said he would cut short an overseas trip and return to Washington, D.C., on Sunday in a sign that talks are heating up.
Source: markets.businessinsider.com
