WASHINGTON – JPMorgan Chase & Co. expects the United States to reach its credit limit. In line with this possibility, the company started creating solutions to prevent this potentially catastrophic event.
JPMorgan Chase & Co already began scenario-planning in response to this possibility. The company predicted that the US credit default could significantly affect the money markets, client contracts, and agency ratings.
The company also stated that this was the third time it had to perform scenario-planning throughout its life.
However, JPMorgan disclosed that it always seemed to find a solution before the worsens.
On the other hand, the company also expressed concern that the US debt limit should not worsen. In line with this issue, the company also expressed the need for the country to develop a bipartisan bill to eliminate the debt ceiling.
The United States is currently developing strategies to meet the $28.4 trillion borrowings before the Treasury Department loses the resources to meet the obligation. Janet Yellen, the treasury secretary, predicts that the country might exhaust its extraordinary measures by October 18, 2021.
The Congressional Democrats expect a US credit default, risking an economic downfall and government shutdown. A solution became less likely amidst the Republican resistance.
However, Secretary Yellen intends to call the biggest Wall Street financial firms to pressure the Republicans to agree to the deal. The Treasury Department did not disclose any other information related to the issue.