US Treasury Secretary Janet Yellen said there are no good options for resolving the current deadlock over the issue of raising the debt ceiling other than Congress lifting the restrictions themselves, as resorting to the 14th Amendment would provoke a constitutional crisis.

Lately, there have been talks that the Biden administration could independently decide to continue issuing debt obligations, referring to the provision of the US Constitution that states the validity of public debts should not be questioned.

Yellen avoided several questions about whether Biden could use this option, constantly returning to the fact that Congress itself must decide on raising the debt ceiling. "If they don't do it, we will have an economic and financial disaster that we create ourselves, and President Biden and the US Treasury Department will not be able to help in the situation to prevent it," she said.

President Joe Biden is set to meet with House Speaker Kevin McCarthy and other congressional leaders on Tuesday to discuss the debt ceiling.

Biden and Republicans in Congress are unhappy with raising the borrowing limit to $31.4 trillion, and Republican Party leaders demand promises of spending cuts in the future before they approve a higher ceiling. Such situations have repeatedly led to government shutdowns due to lack of funding, but a solution was always found at the last moment, and the debt ceiling was raised.

The US government reached the statutory borrowing limit in January, and since then, the Treasury has been using special means to provide cash. These measures may run out as early as June 1, and if a decision on raising the debt ceiling is not made, the US will default on its obligations.

"I don't want to consider emergency options," stated Yellen. "If Congress doesn't do its job – there simply won't be any good options."

Republicans are trying to influence Biden by agreeing to a plan that would raise the debt ceiling by $1.5 trillion, which would be enough to postpone default until March 31 of next year. This will be done in exchange for a $4.8 trillion budget cut. Nearly all Republicans in the Senate said in a letter published on Saturday that they would oppose voting on a bill with a clean increase in the debt ceiling.

Meanwhile, Biden said he was not ready to apply the 14th Amendment to prevent a breach of the debt ceiling, but did not rule out possible executive actions. In any case, there is still time, and the closer it gets to the end, the more chances there are of reaching an agreement on this issue.

In terms of the forex market, euro bulls still have a chance to continue a rally. But in order to do so, the quote has to stay above 1.1030 and take control of 1.1060. This will allow a rise beyond 1.1090 and 1.1130, heading towards 1.1170. In case of a decline around 1.1030, the pair will fall to 1.1000 and 1.0940.

In GBP/USD, bulls are trying to control the market. But to see further growth, the quote has to consolidate above 1.2670 as only that will trigger a much larger rise to 1.2710 and 1.2755. In case there is a decline, bears will attempt to take 1.2630, which could lead to a fall to 1.2590 and 1.2560.