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With a potential default looming for the U.S. in October, Treasury Secretary Janet Yellen said Thursday she would just as soon see the power over debt limits taken away from Congress.

A bill introduced in May would repeal the national debt ceiling, and Yellen said “yes, I would” when asked during a House hearing if she backs the effort.

She noted Congress makes the decisions on taxes and spending, and should provide the ability to pay those obligations.

“If to finance those spending and tax decisions, it’s necessary to issue additional debt, I believe it’s very disruptive to put the president and myself, the Treasury secretary, in a situation where we might be unable to pay the bills that result from those past decisions,” she said in response to a question from Rep. Sean Casten, D-Ill.

The remarks were made during a hearing before the House Financial Services Committee on the Treasury and the Federal Reserve’s economic response to the Covid pandemic.

Casten said he was asking Yellen about the concept of removing the debt ceiling and not the particular bill, introduced by Rep. Bill Foster, also an Illinois Democrat, along with a trio of Democratic senators.

Yellen this week warned that extraordinary measures her department is using to keep funding the government’s operations expire Oct. 18.

Earlier in the hearing, she said the consequences would be dire if Congress fails to raise the spending limit.

“I think it would be catastrophic for the economy and for individual families,” she said.

The U.S. currently is $28.4 trillion in debt, nearly $700 billion of which has been incurred since President Joe Biden took office and chose Yellen to head the Treasury. The budget deficit through the first 10 months of the fiscal year stood at $2.71 trillion.

Higher interest rates took some recent wind out of the sails in the mortgage market.

After gains the previous week, total mortgage application volume fell 1.1% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $548,250 increased to 3.10% from 3.03%. Points, including origination fee, rose to 0.34 from 0.30 for loans with a 20% down payment.

“Increased optimism about the strength of the economy pushed Treasury yields higher following last week’s FOMC meeting. Mortgage rates in response rose across all loan types, with the benchmark 30-year fixed rate reaching its highest level since early July 2021,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

Applications to refinance a home loan, which are highly sensitive to weekly rate movements, decreased 1% from the previous week and were essentially flat from a year ago. The increase in interest rates occurred late in the week and continued into this week, suggesting the negative effect on refinance demand will be more severe in next week’s report.

Mortgage applications to purchase a home fell 1% last week and were 12% lower than a year ago. The weakness in purchase demand is less about rising interest rates, which are still historically low, and more about sky-high home prices.

Prices nationally increased 19.7% year over year in July, up from an 18.7% annual increase in June, according to the latest S&P CoreLogic Case-Shiller Home Price Index. That’s another record increase.

“With home-price appreciation continuing to run hot, increasing more than 19 percent annually in July, applications for larger loan amounts continue to outpace lower-balance loans. The average loan size for a purchase application reached $410,000, its highest level since May 2021,” Kan said.

Price gains are expected to soon start cooling slightly, simply because sales have dropped and more supply is coming on the market. Higher mortgage rates will also take some of the fuel out of rising prices, since potential buyers would face higher monthly payments.

Sen. Elizabeth Warren charged Tuesday that Federal Reserve Chairman Jerome Powell has led an effort to weaken the nation’s banking system, and she vowed to oppose his renomination.

In remarks made during a hearing before the Senate Banking Committee, the Massachusetts Democrat cited several instances where she said the Powell Fed has watered down post-financial crisis bank regulations.

“Your record gives me grave concerns. Over and over, you have acted to make our banking system less safe, and that makes you a dangerous man to head up the Fed, and it’s why I will oppose your renomination,” Warren said.

Powell did not respond to Warren’s comment that she will oppose him.

Warren said deregulatory moves could cause another calamity the likes of which the U.S. saw during the 2008-09 breakdown of Wall Street institutions.

She called Powell “lucky” that banks thus far have been able to avoid major problems, citing the Archegos Capital Management collapse and the banking industry’s collective need for Fed assistance during the coronavirus pandemic as dangers to the system exacerbated by deregulatory moves.

“So far you’ve been lucky. But the 2008 crash shows what happens when the luck runs out,” she said. “The seeds of the 2008 crash were planted years in advance by major regulators like the Federal Reserve that refused to rein in big banks. I came to Washington after the 2008 crash to make sure nothing like that would ever happen again.”

Powell has served since 2018 and his term expires in February. Wall Street widely expects President Joe Biden to renominate Powell, though Warren and other more liberal senators are likely to provide some resistance.

Even if he does seek to give Powell another term, Biden will have a chance to remake the Fed.

Randal Quarles, the current vice chair in charge of supervision, will see his term expire in October, and current Fed Governor Lael Brainard, who favors a stronger regulatory hand, has been given frequent mention as a potential replacement.

Vice Chairman Richard Clarida will see his time on the Federal Reserve Board of Governors expire in January, and there remains another vacancy on the board.

Sen. Robert Menendez, D-N.J., grilled Powell during the hearing on the lack of diversity at the central bank. Biden will face pressure to provide a diverse set of nominees for the Fed vacancies.