Stocks react negatively
Rating agency Fitch is out saying that the debt limit brinksmanship could put US AAA rating at risk.
- Failure of latest efforts to suspend US government debt limit indicates current stand off could be among the most protracted since 2013
- Nevertheless it believes that US debt limit will be raised or suspended in time to avert a default event
- If US debt limit were not raised or suspended in time, political brinksmanship and reduce the financing flexibility could increased risk of sovereign default
The headline may be contributing to a pullback in the S&P and NASDAQ indices. The S&P index is currently up only 5.29 points while the NASDAQ index has turned negative and trades down -18.54 points
Note that the base case four Fitch is still not for a default event.