FX.co ★ Fitch Sees No Near-Term Rating Risk from US Shutdown

Fitch Ratings announced on Wednesday that it does not anticipate the current U.S. government shutdown to impact the nation’s sovereign ratings in the immediate future. The effect on economic growth will largely hinge on the shutdown’s extent and duration. Fitch forecasts a reduction in the general government deficit, projecting it to decrease to 6.8% of GDP by 2025 from 7.7% in 2024, partly fueled by an anticipated increase in tariff revenues, now estimated to hit $300 billion. In a separate assessment, S&P Global Ratings indicated that government shutdowns typically exert only a minimal effect on the broader economy and do not constitute credit events for the U.S. sovereign rating. Nonetheless, it cautioned that secondary ramifications could accumulate over time, as furloughed workers reduce their spending, and delays in essential economic data heighten uncertainty for the Federal Reserve. S&P Global projected that each week of the shutdown could potentially shave 0.1% to 0.2% off GDP growth.