Debt-limit standoff could force fed to revisit emergency playbook

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Committee for a Responsible Federal Budget President Maya MacGuineas discusses the issues that come with the debate over the debt ceiling, from financial uncertainty to a loss of credibility for the U.S.   A crisis-management playbook Federal Reserve officials created years ago could guide their response this fall if the federal government can’t pay all its bills because of a political standoff over raising the federal debt limit. The options include the Fed buying Treasury securities in default on the open market and selling Treasurys owned by the Fed to counteract potentially severe strains in financial markets, according to the transcript of an October 2013 conference call.Among the officials who said those steps shouldn’t be ruled out were Jerome Powell —the central bank’s current chairman who was then a Fed governor—and Janet Yellen —the current Treasury secretary who was then Fed vice chairwoman.PELOSI INSISTS 'TIME OF INTENSITY' AS DEMOCRATS AIM TO PA
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