S&P's Kraemer: Prolonged US Govt shutdown could influence Fed’s tightening cycle
|In an interview with Bloomberg on Monday, S&P Global Ratings Chief Officer, Moritz Kraemer, expressed his take on the impact of the US government shutdown on the Fed’s monetary policy outlook.
Key Points:
If shutdown drags on, it might influence Fed's tightening cycle
A prolonged shutdown could be a drag on US growth.
Every day, there's a loss so there's a slight dampener on the outlook.
If it's a short-term phenomenon, don't think will do much to the economy or the Fed.
All things equal, tax reform should stimulate the economy and give additional impetus to raise rates.
When we lowered rating on the US in August 2011 from AAA to AA+, it's due to the thinking that political institutions in the US are such that timely effective policymaking is more questionable than other AAA-rated sovereigns.
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