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Dimon, business leaders warn debt ceiling brinkmanship risks ‘catastrophe’ By Reuters

by Mike Robinson

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© Reuters. Jamie Dimon, JP Morgan Chase CEO, can be seen watching as U.S. President Joe Biden arrives in Washington for a hybrid meeting with executives and business leaders regarding the White House debt limit. This is October 6th, 2021. REUTERS/Kevin Lamarqu

Trevor Hunnicutt and Steve Holland

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen, JPMorgan Chase (NYSE:) &Co Chief Executive Jamie Dimon and Nasdaq CEO Adena Friedman warned on Wednesday of financial and economic catastrophe if Congress fails to raise the debt ceiling.

These business leaders and three others met U.S. President Joe Biden at White House in an effort to push Republicans to support a higher debt ceiling. They claimed that America’s opposition to it will drive them “right to the brink.” Yellen said that Treasury would be left with “very little cash” on Oct. 18.

Yellen declared Wednesday, “This would result in a devastating outcome.” This must be addressed immediately.

Republicans are asking Democrats to increase the debt ceiling through reconciliation. This process would not need Republican votes. Democrats refused to vote, arguing that Republicans should also participate in the process because there are approximately $8 trillion of spending authorized during Republican Donald Trump’s presidency.

There is a growing rift between congressional Republicans and corporate America over the debt limit. These two groups are usually aligned when it comes to economic issues.

A U.S. debt default would severely hurt the country’s credit rating, plunge the global financial system into turmoil and pose a major risk https://www.reuters.com/world/us/what-watch-market-stress-us-debt-ceiling-deadline-nears-2021-10-05 to company stock prices.

Friedman stated that a prolonged delay in raising U.S. debt limits would lead to markets reacting “very, very negatively.” He added: “We urge you to act as soon as possible.”

Dimon warned that the inevitable consequences of a U.S. meltdown on the market could cause global chaos.

He stated, “We should not even get that close.” This is the time to show American competence and not American incompetence.

Jane Fraser, Chief Executive of Citigroup Inc (NYSE :), stated that failing to raise the ceiling could also cause harm for everyday consumers through increasing borrowing costs, including mortgage debts and credit cards.

“We don’t need a catastrophe of our own making to undermine the progress we have made.”

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