Skip to main content
Tags: shutdown | spending | kevin mccarthy | wall street | economy | moodys

McCarthy Ouster Fuels Shutdown Concerns on Wall Street

By    |   Wednesday, 04 October 2023 08:06 PM EDT

House Speaker Kevin McCarthy's ouster could hurt the U.S. economy, according to some financial experts.

A government shutdown could prompt Moody's to downgrade U.S. debt. A last-second continuing resolution agreed to on Sunday kept the government funded until Nov. 17, but McCarthy forged a deal with Democrats to make it happen.

Some hard-line Republicans, including the eight who voted to oust McCarthy, might not be so amenable.

"While government debt service payments would not be impacted and a short-lived shutdown would be unlikely to disrupt the economy, it would underscore the weakness of U.S. institutional and governance strength relative to other AAA-rated sovereigns that we have highlighted in recent years," Moody's wrote.

"In particular, it would demonstrate the significant constraints that intensifying political polarization put on fiscal policymaking at a time of declining fiscal strength, driven by widening fiscal deficits and deteriorating debt affordability," Moody's said.

Financial markets were tumultuous the day before McCarthy's ouster. The Dow fell 430 points and the S&P 500 declined 1.4%. The bond market saw the biggest damage. The yield on a 10-year Treasury bill topped 4.7 percent Tuesday morning, a 16-year high.

Fears of a recession loom.

"Yields and oil are the big stories. Those have the biggest economic consequences. And they're coming at a time when the economy's especially fragile," Callie Cox, U.S. investment analyst at eToro, told the Hill.

"But these political headlines aren't helping things and they probably are making investors more jittery, even though the economic impacts are likely to be more limited."

Solange Reyner

Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.

© 2024 Newsmax. All rights reserved.


Newsfront
House Speaker Kevin McCarthy's ouster could hurt the U.S. economy, according to some financial experts.
shutdown, spending, kevin mccarthy, wall street, economy, moodys
253
2023-06-04
Wednesday, 04 October 2023 08:06 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
TOP

Interest-Based Advertising | Do not sell or share my personal information

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the NewsmaxTV App
Get the NewsmaxTV App for iOS Get the NewsmaxTV App for Android Scan QR code to get the NewsmaxTV App
NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved