US expected to hit debt ceiling next Thursday

Treasury Secretary Janet Yellen notified Congress today that the U.S. is projected to reach its debt limit on Thursday, Jan. 19, and will then resort to “extraordinary measures” to avoid default, according to a report from the Associated Press.

In a letter to House and Senate leaders, Yellen said her actions will buy time until Congress can pass legislation that will either raise the debt limit or suspend it again for a period of time.

Those measures include delaying some payments, such as contributions to federal employees’ retirement plans, in order to provide some headroom to make other payments that are deemed essential, including those for Social Security and debt instruments.

Past forecasts suggest a default could instantly bury the country in a deep recession, right at a moment of slowing global growth as the U.S. and much of the world face high inflation.