Fitch Ratings warned on Wednesday that it could act if the government shutdown drags on long enough.
“If this shutdown continues to March 1 and the debt ceiling becomes a problem several months later, we may need to start thinking about the policy framework, the inability to pass a budget... and whether all of that is consistent with triple-A,” James McCormack, Fitch’s global head of sovereign ratings, said at an event in London.
If that sounds familiar, it’s because that’s what happened in 2011. Back then, a standoff over raising the debt ceiling led Standard & Poor’s to take the unprecedented step of downgrading America’s AAA credit rating.
Flash forward to today. The debt limit will go back into effect in March, but the Treasury Department will be able to buy time by using extraordinary measures for a few months.
Fitch said in a report last Friday that “evidence of greater dysfunction” could pressure the US credit rating, especially given the rising federal deficit and slowing economic growth.
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