Will US Treasury Secretary Janet Yellen host a meeting of finance ministers? Plenary session of the APEC (Asia Pacific Economic Cooperation) Summit held on November 13, 2023 in San Francisco, California, United States.Reuters/Carlos Barria/File photo Obtaining license rights
SAN FRANCISCO (Reuters) – U.S. Treasury Secretary Janet Yellen said on Monday the U.S. economy is strong and the U.S. Treasury market is safe and liquid, reversing Moody’s decision last week to lower its U.S. debt outlook.
“This is a decision that I do not agree with,” he said at a press conference after the conclusion of the APEC finance ministers’ meeting in San Francisco, California.
The rating agency on Friday downgraded the outlook for the U.S. credit rating from “stable” to “negative”, citing large budget deficits and declining debt-bearing capacity.
Yellen acknowledged that if long-term interest rates continue to rise, debt sustainability will be challenged.
But the Biden administration is “committed to a reliable and sustainable fiscal path,” he said, citing deficit reduction programs and investments in the Internal Revenue Service, which collects taxes.
Yellen also called on House Republicans to work to avoid a partial government shutdown that could come as early as this weekend.
This is the third fiscal showdown this year, following a months-long standoff in the spring that pushed the federal government to the brink of default.
Yellen said a potential government shutdown would be an “unnecessary economic headwind at a time when the U.S. economy is doing well and moving in the right direction.”
The federal budget deficit shrank by nearly a quarter in October compared to the same month last year, the U.S. Treasury said Monday, as an influx of delinquent taxes from disaster-stricken areas pushed revenues to a record for the month.
Last month’s data showed the deficit for the 2023 fiscal year, which ended Sept. 30, was nearly $1.7 trillion, the largest since the COVID-19 era.
Reporting by David Lawder and Ann Saphir.Editing: Tom Hogue and Sri Navaratnam
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