U.S. Treasury extends debt default deadline to June 5

U.S. Treasury Secretary Janet Yellen testifies during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, D.C., the United States, on Sept. 28, 2021. (Matt McClain/Pool via Xinhua)

"Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government's obligations if Congress has not raised or suspended the debt limit by June 5," said U.S. Treasury Secretary Janet Yellen.

NEW YORK, May 26 (Xinhua) -- U.S. Treasury Secretary Janet Yellen on Friday extended the earliest date of default on governmental obligations from June 1 to June 5, leaving more time for the White House and congressional Republicans to hammer out a deal.

"Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government's obligations if Congress has not raised or suspended the debt limit by June 5," said Yellen in an update letter to congressional leaders.

The United States is "highly likely" to default on government obligations by early June and potentially as early as June 1 if the Congress fails to raise or suspend the debt limit, said Yellen in a similar letter on Monday.

The deadline of June 1 was questioned by some congressional Republicans and also a few days earlier than estimates by other research institutions.

The Department of Treasury employed an additional extraordinary measure via swap of Treasury securities on Thursday, noted Yellen.

Yellen continued to warn of the risks from debt limit impasse, adding that Treasury's borrowing costs increase substantially for securities maturing in early June.

Credit rating agency Fitch Ratings announced Wednesday it placed the U.S. AAA-rated long-term foreign-currency issuer default rating (IDR) on a "negative watch" as the debt ceiling deadlock continued.