Analysts expect last-minute US debt limit deal amid political brinkmanship

WASHINGTON – Democrats and Republicans have dug further into their opposing positions on the debt limit, as the United States TreasuryAnalysts, however, remain somewhat optimistic that an agreement to raise the debt ceiling would be reached before the government defaults in June, albeit most likely at the eleventh hour.

Should the political standoff not be resolved in time, it risks a fiscal crisis that could send the US into a recession. Rating agency Moody’s Investors Service also expects the US Congress to reach an agreement in time, although it warns of protracted negotiations. Fitch Ratings senior director Richard Francis told Reuters that he also expected a debt limit agreement would be reached.

“Political brinkmanship with the debt limit would be a massive hit to local economies, American families and would be nothing less than an economic crisis at the hands of the Republicans,” said Senate majority leader Chuck Schumer in a statement on Thursday.While similar political crises were resolved in the past, there is concern among some analysts that this time might be different.

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