Erratic policies: Trump’s threat to shut down govt rattles markets

Fitch announces review of US debt rating if ceiling is not raised

NEW YORK: President Donald Trump’s threat to shut down the US government to secure funding for a wall along the Mexican border rattled markets on Wednesday and cast a shadow over efforts in Congress to agree to raise the country’s debt ceiling and pass spending bills.

Wall Street analysts estimate that Congress has just 12 working days when it returns from its summer recess on September 5 to raise the debt ceiling before the US treasury exhausts the last of its options to remain current on all of the federal government’s obligations.

The Dow Jones Industrial Average fell about 0.3%, the S&P 500 dropped 0.25% and the Nasdaq Composite slid 0.32%. The benchmark S&P also fell below its 50-day moving average again on Wednesday, a key level it has struggled to maintain since falling below on August 10.

Credit ratings agency Fitch said on Wednesday that if the debt ceiling is not raised in a timely manner, it would review the US sovereign debt rating, which is its measure of confidence in the soundness of the US economy.

“If we have to close down our government, we’re building that wall,” Trump said at a rally in Phoenix.

“Trump saying he would be willing to shut down the government over the wall obviously doesn’t really inspire much confidence in anyone,” said Michael O’Rourke, chief market strategist at Jones Trading in Greenwich, Connecticut.

Published in The Express Tribune, August 24^th, 2017.

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