Fed can't protect markets in case of default, says Jerome Powell

"The failure to do that is something that could result in severe damage to the economy and to financial markets and it's just not something we should contemplate," he said

US Federal Reserve Chair Jerome Powell said the central bank doesn’t possess the ability to shield financial markets or the US economy from severe damage should Congress fail to lift the nation’s debt limit in coming weeks and precipitate a default on government obligations.

“It’s just very important that the debt ceiling be raised in a timely fashion so that the United States can pay its bills when and as they come due,” Powell said Wednesday in a virtual press conference following a meeting of the Fed’s interest-rate setting panel.

“The failure to do that is something that could result in severe