Debt-Limit Showdown Splits Credit Raters on US Downgrade Trigger

The three most-cited debt-rating firms are all expecting Congress ultimately to raise the federal debt ceiling — despite a deep partisan divide — though they’re split on the implications of any move to prioritize payments on Treasuries in the event the debate goes into extra time.

Moody’s Investors Service, S&P Global Ratings and Fitch Ratings are all game-planning ahead of the time later this year when the Treasury Department will run out of cash if lawmakers don’t boost the ceiling. Economists and Wall Street analysts see that happening sometime in the third quarter, after the Treasury last week started accounting maneuvers to avoid breaching the ceiling.