Federal Reserve Chairman Jerome Powell is keeping his distance from the ongoing debt ceiling brinkmanship.

"There's only one way forward here and that's for Congress to raise the debt ceiling so that the United States can pay all of its obligations when due,” he said during a press conference Wednesday.

Powell appeared before reporters after the Federal Reserve on Wednesday raised short-term interest rates by a quarter-point, bringing its benchmark rate to the highest level since October 2007.

When asked about the debt ceiling and his central bank's role, he gave little indication of how the Fed could jump in the event of a default. Policymakers are debating whether the Treasury should or are even able to prioritize payments with the Federal Reserve's help to take actions like paying bondholders first if the government runs out of money.

“No one should assume that the Fed can protect the economy from the consequences of failing to act in a timely manner,” Powell said, pushing the issue back Congress. “We're not involved in those discussions. We're the fiscal agent.”

Powell's remarks came as President Joe Biden and House Speaker Kevin McCarthy were sitting down for their first one-on-one meeting Wednesday on the fiscal situation. Talks between Republicans and Democrats have been at a loggerheads and are expected to stretch into the summer.

Previously, Treasury Secretary Janet Yellen ruled out the idea of so-called 'prioritization,' saying the Treasury couldn't do it even if it wanted to. Yellen's department is employing what are called “extraordinary measures” to stave off a crisis. But the accounting maneuvers likely will run out this summer and could push the U.S. economy and markets into uncharted territory if the possibility remains that the U.S. government won't be able to pay its bills.

'I believe that Congress will wind up acting'

During his remarks, Powell said that the central bank was monitoring the situation closely, but didn’t weigh in on more controversial ideas about how the Fed might get involved if the situation turns to a crisis.

Creating a trillion-dollar coin — which would theoretically reside at the Fed if it was minted — or having the central bank buy back Treasury bonds to stave off a default are just two of the many ideas that have been floated among policymakers, professors, and economists.

“In terms of our relationship with the Treasury, we are their fiscal agent and I'm just going to leave it at that,” said Powell, who twice addressed the debt limit situation during the nearly hour-long press conference.

Powell also dismissed the idea Wednesday that the debt ceiling talks have had any impact on decisions to loosen or tighten the Fed's balance sheet in the coming months.

“It’s very hard to think about all the possible ramifications,” he said.

Last week, advocates of minting a trillion-dollar coin gathered virtually and argued that figures like Powell and Yellen may eventually be forced to consider more controversial ideas — no matter what they say now — if the standoff doesn’t ease.

Powell, though, seems to hope the questions end up being moot.

“I believe that Congress will wind up acting as it must in the end to raise the debt ceiling,” he said. "I believe it will happen."

Ben Werschkul is Washington correspondent for Yahoo Finance.

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