If any other country was threatening to default in 9 days the ratings agencies would have already issued a downgrade.
At the very least, they should be issuing a negative creditwatch. In June, Fitch affirmed the US with a AAA-rating with a negative outlook. The reason for the negative outlook was uncertainty over prospect for additional deficit-reduction measures, near-term risks associated with expiration of federal appropriations authority and “in particular” timely increase in debt limit.
They haven’t released anything new since Oct 1 when they said that if the debt ceiling isn’t raised in a “timely manner” it will launch “a formal review of the AAA rating and likely lead to a downgrade.” If anything negative comes, it will probably be from Fitch.Moody’s is a joke. They moved the USA to a triple-A rating with a stable outlook in July, erasing the negative outlook. They didn’t even mention the debt limit in the release. Yesterday, they released a report saying that even a delay in raising the debt ceiling would not lead to a downgrade and hinted that even a default wouldn’t lead to a downgrade.
S&P, meanwhile, downgraded the US two years ago and is the only ratings agency being sued by the US over the housing credit disaster. I think we know what’s going on here but some action from ratings agencies could get Congress moving.
I would argue that any country with an artificial debt limit should never qualify for AAA status. Or as S&P said on Sept 30, “this sort of brinkmanship is the dominant reason the rating is no longer AAA.” More reasons to be scared here.
At the very least, they should be issuing a negative creditwatch. In June, Fitch affirmed the US with a AAA-rating with a negative outlook. The reason for the negative outlook was uncertainty over prospect for additional deficit-reduction measures, near-term risks associated with expiration of federal appropriations authority and “in particular” timely increase in debt limit.
They haven’t released anything new since Oct 1 when they said that if the debt ceiling isn’t raised in a “timely manner” it will launch “a formal review of the AAA rating and likely lead to a downgrade.” If anything negative comes, it will probably be from Fitch.Moody’s is a joke. They moved the USA to a triple-A rating with a stable outlook in July, erasing the negative outlook. They didn’t even mention the debt limit in the release. Yesterday, they released a report saying that even a delay in raising the debt ceiling would not lead to a downgrade and hinted that even a default wouldn’t lead to a downgrade.
S&P, meanwhile, downgraded the US two years ago and is the only ratings agency being sued by the US over the housing credit disaster. I think we know what’s going on here but some action from ratings agencies could get Congress moving.
I would argue that any country with an artificial debt limit should never qualify for AAA status. Or as S&P said on Sept 30, “this sort of brinkmanship is the dominant reason the rating is no longer AAA.” More reasons to be scared here.