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Fed Said to Have Debt Ceiling Plan Involving Market Interventions

Wall Street

Sarah N. Lynch and Jason Lange, REUTERS

 

WASHINGTON (Reuters) — The Federal Reserve drew together extensive plans for handling a U.S. debt default that included scheduling deferred payments and lending cash to investors, according to a top lawmaker who cited Fed documents.

In a June 2014 letter to Treasury Secretary Jack Lew which was seen by Reuters, Texas Republican Representative Jeb Hensarling said his staff reviewed Fed documents detailing the U.S. central bank’s contingency plans if America stiffed its creditors.

The documents showed “planning by the Federal Reserve Bank of New York to minimize market disruptions if the (Treasury) Department decided to delay Treasury bond payments,” Hensarling said in the letter which was also signed by Republican Congressman Patrick McHenry of North Carolina.

 

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