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Fed's Powell: No one should assume Fed can protect economy in debt default

Published 02/01/2023, 03:04 PM
Updated 02/01/2023, 03:05 PM
© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) as a screen shows Federal Reserve Board Chairman Jerome Powell during a news conference following a Fed rate announcement, in New York City, U.S., February 1, 2023. REUTERS/Andrew Kelly

(Reuters) - Congress lifting the debt ceiling is the "only way forward" to allow the federal government to meet its obligations and no one should expect the Federal Reserve to be able to shield the economy from the effects of a failure to do so, Fed Chair Jerome Powell said on Wednesday.

© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) as a screen shows Federal Reserve Board Chairman Jerome Powell during a news conference following a Fed rate announcement, in New York City, U.S., February 1, 2023. REUTERS/Andrew Kelly

"There is only one way forward here, and that’s for Congress to raise the debt ceiling," Powell said in response to a question at his press conference following the Fed's latest interest-rate-setting meeting.

"No one should assume that the Fed can protect the economy from the consequences of failing to act in a timely manner." 

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