JPMorgan Chase CEO Jamie Dimon stated Thursday that politicians ought to be severe concerning the debt ceiling as Congress stays locked in a political struggle to extend the U.S. borrowing restrict.
“We should never question the creditworthiness of the United States government. That is sacrosanct. It should never happen,” Dimon stated Thursday on CNBC’s “Squawk Box” from the World Financial Discussion board in Davos, Switzerland.
His feedback come as Congress stays in a standoff over the debt ceiling, the amount of cash the U.S. is allowed to borrow to pay its payments. Treasury Secretary Janet Yellen said last week that the U.S. would probably hit the ceiling Thursday, saying the occasion would “cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability.”
At the moment, Dimon stated, “Of course Democrats will blame the Republicans and Republicans will blame the Democrats. I don’t care who blames who. Even questioning it is the wrong thing to do… That is just a part of the financial structure of the world. This is not something you should be playing games with at all.”
The present ceiling is about $31.4 trillion. Since the price of authorities operations exceeds federal tax revenues, the U.S. should elevate cash by promoting Treasury bonds, however cannot achieve this past the mandated debt ceiling.
A U.S. default would ship shock waves all through the U.S. and international economies, together with market volatility and frozen federal advantages.
On the broader economic system, Dimon stated inflation will probably stay stubbornly elevated, forcing the Federal Reserve to boost rates of interest larger than 5%.
— CNBC’s Greg Iacurci contributed reporting.