Moody’s: “A shutdown would be credit negative for the US”

From The Fiscal Times:

Moody’s Warns on Shutdown Risk

Moody’s Investors Service warned Monday that a government shutdown would be seen negatively by the credit rating agency. Of the three major rating agencies, Moody’s is the only one that has maintained its top rating for U.S. debt.

“A shutdown would be credit negative for the US sovereign,” Moody’s said in a statement. “In particular, it would demonstrate the significant constraints that intensifying political polarization put on fiscal policymaking at a time of declining fiscal strength, driven by widening fiscal deficits and deteriorating debt affordability.”

Moody’s noted that a shutdown would not affect debt payments and is unlikely to cause long-term harm to the economy. Nevertheless, “it would underscore the weakness of US institutional and governance strength relative to other Aaa-rated sovereigns that we have highlighted in recent years.”


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