FX.co ★ Yellen urges Congress to increase rates soon

US Treasury Secretary Janet Yellen has called on the Congress to raise rates as soon as possible. She also said that growing debt must be stopped, otherwise, "catastrophic" consequences could happen to the US economy.

In 2019, the Congress limited US borrowing and set the restriction until July 31, 2021. Even so, the Treasury is still able to pay government bills, but Yellen said it will be difficult by August because the measures may be exhausted by then, especially if the Congress doesn't take decisive actions. According to her, letting the national debt skyrocket could provoke a financial crisis.

And when asked about projections on inflation, Yellen said it could continue to grow this year, but will remain below 5%. Then, in the next 12 months, it will return to around 2%.

She also commented on the recent announcement of the Federal Reserve, which is a possible two-fold rate hike in 2023. Yellen said the central bank did not confirm that it would raise rates earlier than scheduled, but only expressed possibilities of an increase. She claimed that people misinterpreted Powell's speeches.