FILE PHOTO: The S&P Global logo is displayed on its offices in the financial district in New York City, U.S., December 13, 2018. REUTERS/Brendan McDermid
September 30, 2021
(Reuters) – S&P Global Ratings said on Thursday it anticipates the U.S. Congress will address the debt ceiling in a timely manner, either by raising it or suspending it.
If not, the credit rating agency pointed to “severe and extraordinary consequences” on the financial markets.
“It would be unprecedented in modern times for an advanced G-7 country, like the U.S., to default on its sovereign debt,” S&P said in a bulletin.
S&P noted that during the last decade, Congress passed legislation to raise or suspend the debt limit five times during periods of political impasse.
The world’s largest economy had top credit ratings with all three major credit rating agencies until August 2011, when S&P cut its U.S. rating by a notch to AA-plus amid a previous round of political battles over debt, deficits, and the debt ceiling.
As for a potential government shutdown, S&P said it would not have a direct impact on creditworthiness.
The Congress appeared poised on Thursday to pass a measure to fund federal government operations into December, a move that would avoid a shutdown this week. [W1N2PJ02N]
U.S. Treasury Secretary Janet Yellen has warned the government could run out of cash by Oct. 18, leading to an unprecedented default on its obligations. A suspension of the debt ceiling expired in late July and Democrats and Republicans in Congress remain at odds.
(Reporting by Mehr Bedi in Bengaluru and Karen Pierog in Chicago; Editing by Shailesh Kuber and David Gregorio)
Source: One America News Network
