The government shutdown threatens the US with a credit-rating cut for only the 2nd time in history
- Big Three ratings agency Fitch warned that the continuing government shutdown puts the US at risk of losing its "AAA" credit rating in the near future.
- James McCormack, Fitch's global head of sovereign ratings, made the warning at an event in London Wednesday.
- The US has only been downgraded by a major ratings agency once before, during the 2011 debt-ceiling crisis.
Fitch, one of the "Big Three" ratings agencies, has warned that the continued government shutdown puts the US at risk of losing its "AAA" credit rating in the near future.
Speaking in London Wednesday, James McCormack, Fitch's global head of sovereign ratings said that if the government shutdown continues long enough to push the US into hitting its debt ceiling, that could lead to a downgrade, something that has only happened once before.
"If this shutdown continues to March 1 and the debt ceiling becomes a problem several months later, we may need to start thinking about the policy framework, the inability to pass a budget ... And whether all of that is consistent with triple-A," he said.
The government shutdown entered its 19th day Wednesday, with seemingly no ending in sight, as Republicans and Democrats remain unable to find a compromise on funding for President Trump's proposed wall on the southern border.
Read more: Trump compares his border barrier to the walls of 'wealthy' politicians' homes
The first and only time the US received a downgrade from a major ratings agency was in 2011, when S&P downgraded the world's largest economy from a "AAA" rating to "AA+." At the time the US had just raised its debt ceiling, allowing trillions of dollars of additional government spending. The "AA+" remains in place to this day.
Fitch previously warned in early 2018 that it could downgrade the US credit rating, but did not do so.