I don’t get the sense that the public is in any mood for a US government shutdown, especially after the ridiculous debt ceiling theatrics in May but I will never underestimate the stupidity of politicians.
Hundreds of thousands of US government workers will be furloughed starting on Oct 1 if Congress fails to pass a funding bill. It would also mean that US economic data publication is halted indefinitely.
“A shutdown would be credit negative for the US sovereign,” Moody’s, which has a triple-A rating for the U.S. government, 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.”
The longer the shutdown lasts, the more negative it would be, Moody’s said.
Fitch downgraded the US in August and said one of the reasons was the debt ceiling drama. Moody’s is the only major credit ratings agency that has a top credit rating for the US.