FX.co ★ US Treasury Chief Dismisses Default Fears as Debt Deadline Looms

Treasury Secretary Scott Bessent assured the public that the United States will "never default," even with the debt ceiling deadline approaching. In an interview with CBS, he expressed confidence by saying, "We are on the warning track and we will never hit the wall." The negotiations have become pivotal, as Congressional Republicans have linked increasing the debt limit to President Trump's tax and spending bill. The Senate is expected to address the bill this week. Bessent refrained from mentioning an "X date"—the critical point when the Treasury would deplete its cash reserves and accounting strategies to avoid breaching the ceiling. He commented, "We use that to move the bill forward." In a prior communication, he alerted legislators that without raising the ceiling, borrowing authority might be exhausted by August. Analysts anticipate the deadline will occur between late August and mid-October. Dismissing concerns, Bessent refuted JPMorgan CEO Jamie Dimon's forecast of a potential bond market disruption, noting that "fortunately, none of them have come true." Bessent highlighted the importance of a long-term strategy to reduce the deficit, stating, "The goal is to bring it down over the next four years."