Treasury Secretary Janet Yellen said the Federal Reserve likely wouldn’t accept a $1 trillion platinum coin if the Biden administration tried to mint one to avoid breaching the debt limit.
LUSAKA, Zambia — Treasury Secretary Janet Yellen said the Federal Reserve likely wouldn’t accept a $1 trillion platinum coin if the Biden administration tried to mint one to avoid breaching the debt limit, dismissing an idea that has been floated to circumvent Congress on the issue.
Some Biden administration officials and Democrats on Capitol Hill have discussed the possibility that the Treasury could use an obscure law authorizing platinum coins in the event of a potential default. Under the proposed scheme, the Treasury would mint a $1 trillion coin and deposit it at the Fed, and then draw the money to pay the country’s bills.
Yellen, who is a former chair of the Fed and meets regularly with current Fed chair Jerome Powell, said the central bank may not go along with such a plan. Fed officials have previously raised concerns about being relied upon to resolve fiscal debates in Congress. “It truly is not by any means to be taken as a given that the Fed would do it, and I think especially with something that’s a gimmick,” she said in a Sunday interview with The Wall Street Journal onboard an Air Force plane traveling to Lusaka, Zambia, where she is traveling as part of a multicountry tour to bolster U.S.-Africa ties. “The Fed is not required to accept it, there’s no requirement on the part of the Fed. It’s up to them what to do.”An expanded version of this report appears on WSJ.
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