With negotiations on the U.S. debt ceiling crisis seemingly in limbo, JPMorgan Chase is conducting weekly meetings to address the crisis. JPMorgan Chase CEO Jamie Dimon told Reuters that the bank’s “war room” could move to daily meetings if officials fail to find a solution.
According to Dimon, a prolonged crisis could lead to those daily meetings as soon as May 21. He also suggested that the bank could hold multiple meetings each day if the standoff continues. The CEO warned that even “getting close” to a default could spark panic in his industry.
The debt ceiling crisis
U.S. officials have suggested that the nation will run out of money soon if the debt ceiling is not raised. That debt ceiling is a legislatively imposed limit on the amount of money that government is allowed to borrow. The current limit is about $31.4 trillion, an amount that was surpassed in January.
Since that time, Treasury officials have been utilizing what they call “extraordinary measures” to meet the government’s need for additional cash. Treasury Secretary Janet Yellen and economic forecasters claim that the government will default in June unless the debt ceiling is raised.
Each side’s stance on the negotiations
The debt ceiling crisis has been months in the making, with both political parties staking out clear positions. The Republicans have insisted on tying any increase in the limit to some level of spending restraint. In April, House Republicans passed a measure to raise the debt ceiling while capping spending at 2022 levels.
That proposal has been met with objection by Senate Democrats and President Biden. The Democrat position has been to insist on a clean debt limit increase. In recent days, the White House has offered to consider talks on spending reduction as well. However, they want such talks to be separate from any debt limit increase.
Meanwhile, some media outlets continue to insist that the debt ceiling crisis is unprecedented. Recent history proves otherwise. In 2011, a similar standoff occurred. That crisis resulted in a compromise that included $900 billion in spending cuts.