Beautiful Virgin Islands

Thursday, Jun 26, 2025

US Debt Default Would Have 'Very Serious' Global Repercussions: IMF

US Debt Default Would Have 'Very Serious' Global Repercussions: IMF

The IMF warned Thursday of the potential for higher borrowing costs, broader global instability and economic repercussions in the event of a US default.
The International Monetary Fund warned Thursday of severe consequences if the US defaults on its debt, ahead of a rapidly-approaching deadline for the country to raise or suspend its borrowing limit.

"Our assessment is that there would be very serious repercussions not only for the US but also for the global economy should there be a US debt default," IMF communications director Julie Kozack told reporters, encouraging all parties to urgently resolve the matter.

Republicans and Democrats remain sharply divided over the debt ceiling, with Republicans in Congress insisting that President Joe Biden's administration agree to significant budget cuts in exchange for support to lift the limit before the country runs out of money to pay its existing bills.

Democrats have been calling for a "clean" increase of the borrowing limit, accusing Republicans of using extreme tactics to try and push their political agenda ahead of the so-called "X-date" -- the point at which the US will be unable to meet its financial obligations.

Broader Instability

The IMF warned Thursday of the potential for higher borrowing costs, broader global instability and economic repercussions in the event of a US default.

"We have seen a world in the last few years that has been affected by many shocks, so we would want to avoid those severe repercussions," Kozack said.

The lifting of the debt ceiling has historically been seen as a routine affair, given that it involves raising money to pay for spending commitments already made by Congress.

When Republicans won a narrow majority in the House of Representatives during last year's midterm elections, the right wing of the caucus insisted incoming speaker Kevin McCarthy tackle the ballooning US debt in exchange for their support.

But with the Biden administration refusing to negotiate on the debt ceiling, a standoff has arisen just weeks before the US risks running out of money to pay its obligations.

President Biden met with McCarthy earlier this week in a failed attempt to find common ground on the issue.

"Default is not an option," Biden said after the talks had concluded, while McCarthy told reporters he "didn't see any new movement" in the meeting, which was also attended by the Senate majority and minority leaders and the minority leader of the House.

The talks will resume on Friday as both sides look to resolve the issue before the X-date, which the US Treasury recently warned could come as soon as June 1.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
BBC Demands Perplexity AI Immediately Stop Using Its Content
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
×