US Government Shutdown Threat Builds in Post-Downgrade Fallout

A fresh fiscal showdown is brewing in Washington that threatens to complicate the Federal Reserve’s policy making and strengthen Fitch Ratings’ warning that self-inflicted wounds are tarnishing America’s standing in the global economy.

  • Congress left for an extended August recess without resolving simmering conflicts over spending and hot-button social issues, raising the risk of a government shutdown when federal funding runs out after Sept. 30.
  • It’s the latest case of brinkmanship over the national budget that fueled Fitch’s move to strip US debt of its prized AAA status last week — a landmark decision that’s caused hand-wringing across Wall Street and Washington.

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