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U.S. faces a recession if Congress doesn’t address the debt limit within 2 weeks, Yellen says

In Washington, lawmakers are still trying to agree to raise or suspend the U.S. borrowing limit and avert a dangerous first-ever default on the national debt. The Treasury Department warned last week that lawmakers must address the debt ceiling before Oct. 18 when officials estimate the U.S. will exhaust emergency efforts to honor its bond payments.

Treasury Secretary Janet Yellen said Tuesday she believes the economy would fall into a recession if Congress fails to raise the debt ceiling before a default on the U.S. debt.

“It would be catastrophic to not pay the government’s bills, for us to be in a position where we lacked the resources to pay the government’s bills,” Yellen said during an interview on CNBC’s “Squawk Box.”

Still, some believe the outlook for equities remain robust after the weak September as the economy continues to rebound from the Covid crisis.

Reference: CNBC