Moody's Warns US Government Shutdown Poses Credit Risk

Moody's has warned that a US government shutdown would be "credit negative" for the country, highlighting the weakness of its institutional and governance strength compared to other top-rated governments. While the economic impact would likely be short-lived, the shutdown would disrupt government services, furlough federal workers, and suspend the publication of major economic data. Moody's emphasized that a prolonged shutdown would have a more negative impact on the broader economy and financial markets. The agency also noted that political polarization is impacting fiscal decisions and warned that weaker fiscal policymaking could put pressure on the US credit rating or outlook.