<p>The only member of the &#8220;Big Three&#8221; agencies that has not downgraded the U.S. credit rating from &#8220;<a href="https://www.moodys.com/credit-ratings/United-States-of-America-Government-of-credit-rating-790575?lang=en&amp;cy=emea">AAA</a>&#8221; status warned that another <a href="https://www.dailywire.com/topic/government-shutdown">government shutdown</a> would make the <a href="https://www.dailywire.com/topic/united-states">United States</a> look weak compared to other top-rated nations.</p>
<p>Moody’s Investors Service sounded the &#8220;credit negative&#8221; alarm in a <a href="https://www.moodys.com/research/Political-Risks-US-FAQ-Potential-credit-implications-of-a-government-Sector-In-Depth--PBC_1382084#What-impact-could-it-have-on-the-US-sovereign-credit-profile">note</a> on Monday as Congress scrambles to <a href="https://www.dailywire.com/news/mike-lee-argues-congress-should-avoid-government-shutdown">reach a deal to fund</a> various arms of the federal government with the new fiscal year starting at the beginning of next month.</p>
<p>“While government debt service payments would not be impacted and a short-lived shutdown would be unlikely to disrupt the economy, it would underscore the weakness of US institutional and governance strength relative to other AAA-rated sovereigns that we have highlighted in recent years,” Moody&#8217;s said, <a href="https://www.cnn.com/2023/09/25/economy/moodys-us-government-shutdown-credit-rating/index.html">according to CNN</a>.</p>
<p>“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,&#8221; the note added.</p>
<p>The two other &#8220;Big Three&#8221; credit agencies started knocking the United States down from its top-rated &#8220;AAA&#8221; perch more than a decade ago across years of rising U.S. government budget numbers and the debt doubling since 2011 <a href="https://www.usdebtclock.org/">to more than $33 trillion.</a> Analysts <a href="https://abcnews.go.com/Business/us-credit-downgrade-means-economy-finances/story?id=101946875">say</a> that such a drop could lead to a rise in borrowing costs, hikes in interest rates, and hurt the economy.</p>
<p>In 2011, S&amp;P bumped the U.S. long-term rating from its &#8220;AAA&#8221; perch to &#8220;AA+&#8221; — where it stands today — citing &#8220;<a href="https://www.washingtonpost.com/wp-srv/politics/documents/spratingreport_080611.pdf?itid=lk_inline_manual_3">political brinkmanship</a>&#8221; and the debt burden just days after then-President Barack Obama <a href="http://www.cnn.com/2011/POLITICS/08/02/debt.talks/index.html">signed legislation</a> to lift the debt ceiling just days before it was estimated the U.S. could have defaulted on its financial obligations.</p>
<p>Fitch Ratings <a href="https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023">downgraded</a> the country&#8217;s Long-Term Foreign-Currency Issuer Default Rating from top-rated &#8220;AAA&#8221; to &#8220;AA+&#8221; less than two months ago after the federal government <a href="https://www.dailywire.com/news/biden-signs-bill-to-increase-debt-ceiling-avoid-federal-default">narrowly avoided</a> a default on its debt over the summer and ahead of the spending showdown now taking place in a politically-divided Congress.</p>
<p>Although Moody&#8217;s did not announce a downgrade on Monday, it did predict a more &#8220;pronounced&#8221; impact on economy and GDP forecasts if a shutdown ends up being &#8220;protracted and it impaired national business and consumer confidence or triggered an adverse reaction in financial markets.&#8221;</p>
<p>Moody&#8217;s analyst William Foster <a href="https://www.reuters.com/markets/us/moodys-warns-us-government-shutdown-would-be-credit-negative-2023-09-25/">told Reuters</a> the &#8220;likelihood of that having an increasingly negative impact on the credit profile will be there&#8221; if there is &#8220;not an effective fiscal policy response to try to offset&#8221; pressures on U.S. government debt affordability due to higher interest rates.</p>
<p>&#8220;And that could lead to a negative outlook, potentially a downgrade at some point, if those pressures aren&#8217;t addressed,&#8221; he added.</p>

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Top Credit Rating Agency Warns Government Shutdown Would Make U.S. Look Weak