Rating agency Fitch says debt limit brinksmanship could put AAA rating at risk

Stocks react negatively

Rating agency Fitch is out saying that the debt limit brinksmanship could put US AAA rating at risk.

• Failure of latest efforts to suspend US government debt limit indicates current stand off could be among the most protracted since 2013
• Nevertheless it believes that US debt limit will be raised or suspended in time to avert a default event
• If US debt limit were not raised or suspended in time, political brinksmanship and reduce the financing flexibility could increased risk of sovereign default

The headline may be contributing to a pullback in the S&P and NASDAQ indices. The S&P index is currently up only 5.29 points while the NASDAQ index has turned negative and trades down -18.54 points

Note that the base case four Fitch is still not for a default event.