Fed official warns of ‘extreme’ market reaction unless debt ceiling raised
US politics & policy updates
Sign up to myFT Daily Digest to be the first to know about US politics & policy news.
Two top Fed officials on Monday warned that failing to raise the US debt ceiling would have catastrophic consequences, hours before Republicans in the Senate were set to block a bill that would increase the borrowing limit and stave off a government shutdown.
John Williams, the president of the Federal Reserve Bank of New York, said the US central bank would be unable to mitigate the impact of a potential default on the government’s debt. The Bipartisan Policy Center, a Washington think-tank, estimated last week that the US government could default on its obligations as soon as mid-October if the debt ceiling is not raised.
Williams warned reporters of the risk that investors could become “extremely nervous” and think “I’ve got to get out of…