(MENAFN) United States Treasury Secretary Janet Yellen issued a grave cautionary on Saturday if the nation doesn't raise its legal debt ceiling in the upcoming months. The senior official predicted that a financial catastrophe might result from the United States defaulting on its debt before the end of the summer.

“It makes me nervous…It would be devastating. It's a catastrophe,” Yellen informed Axios news outlet, noting that “we’ll have a financial crisis and I believe we would have recession in the United States.”

According to Yellen, "Spending would have to decline to match the tax revenues," which would prevent the government from providing stimulus to the economy. Additionally, "psychological consequences" such as individuals being reluctant to spend money might "further impact spending and deepen a recession."

She also pointed out that a full-blown United States debt default would have an impact on the whole world economy. On the other hand, Yellen also mentioned that “Americans would face higher borrowing costs, and it would cause a good deal of turmoil globally as well.”

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