Fed Proso: The Federal Reserve Is Preparing Contingency Plans For A Default.

In view of the increasing urgency of the time, there is still no substantial progress in the negotiations between the two parties on raising the debt ceiling, said Philadelphia Fed President Robert plas. Federal Reserve The US Treasury is preparing contingency plans for breach of contract.

With the coming of August 2nd, U.S.A There is still no substantial progress in the negotiations between the government and Congress on raising the debt ceiling. The Federal Reserve is actively preparing for the US default.

Philadelphia Fed chairman Proso (Charles Plosser) said the Federal Reserve has been working closely with the US Treasury for months to find out how to deal with the US government's exhaustion of funds.

"We are in a state of emergency," Proso told an interview. We are all involved. This time we have taken very active actions. "

He also said he had a strong feeling that President Obama (Barack Obama) and Congress could agree on raising the US debt ceiling to avoid US government debt default.

Obama plans to meet with senior Republican officials on Thursday (20) to discuss the latest proposal to end the unresolved debate between the two parties on raising the US debt ceiling. And there is no real progress in the debate between the two parties on this issue, and the possibility of the US Treasury's exhaustion of funds in August is also increasing.

The US Treasury has repeatedly said that the consequences of default are unthinkable and there is no alternative to raising the debt ceiling. Proso's speech means that most public comments have yet to turn to preparations for us debt default.

About the Federal Reserve and Treasury Department A spokesman for the US Treasury Department did not immediately respond to a joint study of ways to deal with the breach.

On the one hand, the Federal Reserve's emergency plan is entirely operational. As the withdrawal Bank of the US Treasury, the Federal Reserve is very clear about every government debt, and the Federal Reserve is studying how to tell which debts can be liquidated and what debts can not be cleared.

"We are studying the procedures and ways in which the Treasury allows us to do things," he added, adding that the work can be done. "But how does the Federal Reserve pay off government debt? How to do well is not good.

He pointed out that many people have been involved in this work. And the Fed has many problems to deal with. The Fed provides concessionary loans to banks under the premise of good collateral, but what will happen if the US Treasury does not meet this requirement? The Fed faces more problems from policy.

Proto argued that the Federal Reserve might need to raise interest rates before the end of the year, no matter whether the US economy is showing signs of weakness again. He believes that in the second half of 2011, the annual growth rate of US economy will be 3%-3.5%, and the unemployment rate will probably drop to 8.5% by the end of the year.

"My prediction is close to reality," he said. "The more I think the Fed should be." take Some actions. I will be more confident in my prediction.

Prosos attributed the slowdown in the US economy in the first half of the year to some highly recognised factors, such as the increase in weather, oil prices and the supply chain terminals caused by Japan's earthquake. He also pointed out the uncertainty caused by European financial chaos and the entanglement of the US debt ceiling.

He said, "I don't think the US economy has changed much. Indeed, the US economy has suffered some shocks and obstacles this year, but the power to support the slow and gradual recovery of the US economy still exists.

He said the Federal Reserve is responsible for financial stability. Once the US debt default and market stagnation, the Federal Reserve will provoke the ultimate source of funding.