Failure to raise U.S. debt limit worse than government shutdown: Moody's

Reuters

A failure to raise the U.S. borrowing limit would be more damaging to financial markets than a government shutdown, Moody's Investors Service said on Tuesday.

Moody's expects that the United States will avoid a shutdown and increase the debt limit, the rating agency said in a report.

Continue Reading Below

But failure to lift the cap on what the government can borrow could "theoretically affect all categories of government spending, including debt service."

(Reporting by Luciana Lopez Editing by W Simon)