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Fed official stresses importance of dollar’s standing

May 19, 2023

Neal’s remarks come as President Joe Biden and Republican congressional leaders wrangle over whether and under what terms to increase the U.S. debt ceiling to avoid a default. A failure by the U.S. to pay its debts would likely roil credit markets worldwide and potentially trigger a severe recession, according to U.S. Treasury officials. The partisan jockeying over the debt limit is closing in on a June 1 deadline.

Policymakers’ decisions will determine whether the U.S. dollar continues to be the dominant global currency, Neal said, and she pointed to the domestic benefits that flow from that being the case.

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