From The Hill: Fitch eyes downgrade amid chaos
In its announcement, Fitch said it believed the debt ceiling could be raised but criticized Washington politics for undermining international confidence in the U.S. system.
“Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default,” the rater said in a statement.
“The U.S. risks being forced to incur widespread delays of payments to suppliers and employees, as well as Social Security payments to citizens — all of which would damage the perception of U.S. sovereign creditworthiness and the economy.”
Investors on Tuesday showed tepid interest in a weekly offering of Treasury bonds amid growing concern about the reliability of U.S. debt. Citigroup reportedly told analysts it was getting rid of any Treasury debt due to mature around the end of the month.
Outside experts believe the government could be in danger of a default anytime between Oct. 22 and Nov. 1.
The stock market has yet to show any dramatic swings, but markets closed before the House canceled its plans for a vote. The Dow Jones Industrial Average ended the day down 135 points.
A spokesman for Standard & Poor’s, which downgraded the nation in the aftermath of the 2011 debt limit fight, said that rater still expects a last-minute deal to emerge. And Moody’s Investors Service said earlier this month it sees no risk of a default even if the debt limit is not raised, saying the Treasury would ensure interest payments on debts were made above all others.
