How the Debt Ceiling Debate Could Affect America’s Credit Rating
- Moody’s sees approach assuring nation’s full faith and credit
- Fitch says use of method would warrant review of top grade
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Ratings companies expect Treasury Secretary Steven Mnuchin will resort to prioritizing U.S. debt payments if Congress fails to raise his borrowing authority in time. Yet the firms are in stark disagreement over what that would mean for the nation’s credit.
Moody’s Investors Service said Thursday that if Treasury exhausts the measures it’s using to fund itself and turns to prioritizing debt service over other obligations, the U.S.’s top rating would be safe. On the other hand, Fitch Ratings said Wednesday that such a move might jeopardize the country’s AAA rank.