Treasury Secretary Steven Mnuchin signaled he would agree to a short-term debt limit increase if Congress can’t reach a long-term solution that includes a budget deal before its August recess.

Mnuchin also told reporters during a press briefing in Chantilly, France, where he was meeting with Group of Seven counterparts, that Congress and the Trump administration have reached a separate deal on spending levels for two years and are now discussing possible offsets.

“I don’t think the markets should be concerned,” Mnuchin told CNBC in an interview from France Thursday. “I think that everybody is in agreement.”

Mnuchin has said that under one of the Treasury Department’s most conservative estimates, the U.S. will be at risk of defaulting on payment obligations in early September -- before lawmakers are scheduled to return from their summer recess on Sept. 9.

“I’ve been clear in communicating to leadership in both parties in Congress that they should raise the debt ceiling before they leave, whether it’s a permanent raise or a temporary raise, we don’t want to run into any problem in the first week of September,” Mnuchin told reporters.

“The preference from all three sides -- the administration the House and the Senate -- would be to try to get an agreement that includes both the caps deal offset and raising the debt ceiling,” he said. “I think we’re very close to having an agreement.”

Senate Majority Leader Mitch McConnell early on Thursday in a Fox Business interview said “of course” Congress will lift the debt ceiling before the U.S defaults.

House Speaker Nancy Pelosi said earlier this week she sees “forward motion” as her talks with Mnuchin continue. The pair have another call scheduled on Thursday, Mnuchin said, to continue to negotiate higher spending levels in a budget deal that congressional leaders want to attach to a bill raising the debt limit before the August break.

This article was provided by Bloomberg News.