(Bloomberg) -- Fitch Ratings, which stripped the US of its top credit grade two months ago, said a potential government shutdown after Representative Kevin McCarthy's ouster as House Speaker won't have an effect on the nation's rating.
The comments came after McCarthy lost his leadership post following a revolt by Republican party hardliners over his compromise with Democrats to avert a shutdown last weekend. Analysts, including those at Goldman Sachs Group Inc., said the ouster elevates the risk of a shutdown next month.
“We expect that political brinkmanship around government funding negotiations will remain tense and a shutdown later this year can't be ruled out,” said Richard Francis, Fitch's co-head of Americas sovereign ratings, in a statement to Bloomberg News. “No matter, we don't think that the political brinkmanship or even a government shutdown in the coming weeks would affect the US's ‘AA+'/Stable sovereign rating.”
McCarthy had held the job of US House Speaker for nine months, with his removal coming after a decision to allow a vote on a funding extension. His replacement may be deterred from offering a similar bill before a Nov. 17 deadline.
Fitch downgraded the US's credit rating to AA+ from AAA in August, citing a “steady deterioration” in governance standards over the last 20 years, including on fiscal and debt matters. The move partly contributed to a bond rout that saw both 10- and 30-year Treasury yields touch the highest levels since 2007.
Read More: Why the US Credit Rating Was Cut and What It Means: QuickTake
Meanwhile, credit graders S&P Global Ratings and Moody's Investors Service Inc. said they don't have plans to comment on McCarthy's leadership change. Moody's, the only remaining major ratings firm to give the US a top rating, warned in late September that its confidence is wavering ahead of a possible shutdown.
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