JPMorgan Chase Head Jamie Dimon Says Bank Is Preparing for U.S. Reaching Its Debt Limit As Lawmakers Race to Approve Spending Package

JPMorgan Chase & Co CEO Jamie Dimon said that the bank has started its preparations for the possibility that the United States might hit its debt limit.

Dimon added that they expect policymakers to find a solution to avoid the said "potentially catastrophic event," according to a Reuters report.

Dimon noted that the company is reviewing how the debt default would affect client contracts and money markets.

The CEO noted that this is the third time that the bank has had to do this. He added that every time this situation comes up, it gets fixed.

However, Dimon also said that it should never even get this close to the possibility of reaching the debt limit. He suggested that one day the country should have a bipartisan bill and get rid of the debt ceiling.

Dimon said that "it's all politics."

Treasury Secretary Janet Yellen noted that the Treasury will likely engage in extraordinary measures by October 18, which could possibly cause the first federal credit default in history, according to a Daily Mail report.

Dimon said that if he remembers correctly, the last time they prepared for a situation like this, it had cost them $100 million.

Spending Package Bill

Senate Republicans have recently refused to suspend the federal debt ceiling.

The measure had left Democrats only three days to find another way to keep the government operating beyond Thursday when current funding expires.

GOP Sen. Richard Shelby said that the solution would probably be ready by Thursday, according to The Guardian report.

Chuck Schumer, the Senate Democratic leader, warned that a default would impact the economy. However, he did not specify what the next step would be to avoid a government shutdown this week.

Schumer said on the Senate floor the country is facing two Republican-made disasters.

Republicans have refused to vote with Democrats on the debt ceiling despite Democrats doing so under the Trump administration, which was when Republican tax cuts were added to the national debt.

Senate minority leader, Mitch McConnell, said that they will not provide Republican votes for raising the debt limit, adding that they will support a clean continuing resolution that will prevent a government shutdown.

House majority leader, Rep. Steny Hoyer, said in a letter released to media that holding the debt limit hostage is "dangerous, illogical, and irresponsible."

Meanwhile, U.S. President Joe Biden and his top aides called on members of his own party to fund not just infrastructure, but also the administration's broader agenda, according to another Reuters report.

Biden had privately met with some lawmakers, including conservative Democratic Sens. Kyrsten Sinema and Joe Manchin.

White House Press Secretary Jen Psaki noted that the president has asked his team to follow up later this afternoon to continue the talk.

However, they declined to comment on how far the talks had developed.

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Written by: Mary Webber

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