The historic ouster this week of House Speaker Kevin McCarthy (R-Calif.) gave new weight to Fitch Ratings’s downgrade of U.S. credit over the summer.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch wrote in August.
McCarthy’s precedent-setting removal was prompted by yet another narrowly avoided government shutdown. It followed an earlier last-minute deal reached in June to stop a default.
Markets have been responding with their own malaise.
The Dow Jones Industrial Average of big U.S. stocks is down 50 points on the week, 1,000 points on the month, and is about even on the year.
Treasury yields are way up on the uncertainty, with the 10-year note returning 4.78 percent, the highest level since 2007.
While Rep. Patrick McHenry (R-N.C.), a close McCarthy ally, is currently leading the House as acting Speaker, lawmakers are eyeing a potential election for the next leader on Wednesday.
The Hill’s Tobias Burns has more here on this and the other major stories in the economy this week.
