US Treasury Sec. Yellen warns of a global downturn on US default

US Congress should raise debt ceiling, warns US default would produce 'economic and financial catastrophe'.

Default would risk undermining US global economic leadership, raise questions about its ability to defend national security interests.

Markets are seeing possibility of US debt limit breach as growing downside risk.

Short of default, brinksmanship over debt limit could impose 'serious economic costs', already seeing spikes in interest rates.

Despite downside risks, global economy remains in better place than predicted six months ago, inflation down in most G7 countries.

US Will coordinate efforts with G7 to push for timely, comprehensive debt treatments for countries in debt distress.

Will work with G7 counterparts to increase economic resilience, boost economic security and build reliable critical supply chains.

G7 will discuss ways to partner with developing countries to move away from solely extractive industries into higher-value work.

US will work with G7 to effectively counter 'economic coercion', mitigate geostrategic risks in our economies.

There's a lot of uncertainty about impact of possible default on US debt.

Breaching debt ceiling for meaningful period of time could result in a very substantial downturn.

Biden administration has been discussing restrictions on outbound investment to China for some time.

US has been engaging in discussions with G7 colleagues, has not finalized approach.

A US move on outbound investment would be narrowly focused and targeted at technologies where there are national security implications.

We would like to work jointly with our partners and are continuing discussions.

There have been examples of China using economic coercion on countries that China's not happy with, including Australia and Lithuania.

Many G7 members share a common concern with China's use of economic coercion and are looking to see what could be jointly done to counter this kind of behavior.