Fed Can’t Protect US Economy From Debt Default, Powell Says

Federal Reserve Chair Jerome Powell said the failure to raise the US government debt limit would be unprecedented and have highly uncertain and negative effects on the economy.

“We’d be in unchartered territory and the consequences on the US economy could be highly uncertain and adverse,” Powell told reporters Wednesday after Fed officials completed their two-day policy meeting. “No one should assume that the Fed can protect the economy from the potential short and long-term effects of a failure to pay our bills on time.”