Yellen calls CEOs with warning on US debt ceiling

Washington: US Treasury Secretary Janet Yellen has been calling CEOs and business leaders to discuss the consequences of brinkmanship around the debt ceiling.

The calls come on the heels of Yellen’s message to Congress that the US could default on its obligations as soon as June 1, if lawmakers don’t address the debt limit before then — an accelerated timeline that increased pressure on President Joe Biden and House Republican lawmakers to ramp up their talks, CNN reported.

The Congressional Budget Office has also forecast that there is a “significantly greater risk that the Treasury will run out of funds in early June” because of weaker-than-expected tax collections.

In a report published last week, White House economists said that a protracted default would wipe out more than 8 million jobs and cut the value of the stock market in half.

The report estimated the impact under three scenarios: brinkmanship, a short default and a protracted default.

Fitch affirms India’s long term foreign currency issuer default rating

Chennai: India’s robust growth outlook, resilient external finances, higher gross domestic product (GDP) growth, improving financial sector and other factors enabled Fitch Ratings to affirm the country’s Long Term Foreign Currency Issuer Default Rating (IDR) at ‘BBB-‘ with a Stable Outlook.

According to Fitch, India’s rating reflects strengths from a robust growth outlook compared with peers and resilient external finances, which have supported India in navigating the large external shocks over the past year.

These are offset by India’s weak public finances, illustrated by high deficits and debt relative to peers, as well as lagging structural indicators, including World Bank governance indicators and GDP per capita.

The credit rating agency said it forecast India to be one of the fastest-growing sovereigns globally at 6% in the fiscal year ending March 2024 (FY24), supported by resilient investment prospects.

Still, headwinds from elevated inflation, high interest rates and subdued global demand, along with fading pandemic-induced pent-up demand, will slow growth from our FY23 estimate of 7.0 per cent before rebounding to 6.7 per cent by FY25.

On inflation, Fitch forecasts the headline inflation to decline, but remain near the upper end of the Reserve Bank of India’s 2 per cent-6 per cent target band, averaging 5.8 per cent in FY24 from 6.7 per cent last year.

Image courtesy of Wikipedia

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