Moody’s Investors Service, the only remaining major credit grader to assign the US a top rating, has signaled that its confidence is wavering.

“While government debt service payments would not be impacted and a short-lived shutdown would be unlikely to disrupt the economy, it would underscore the weakness of US institutional and governance strength relative to other Aaa-rated sovereigns that we have highlighted in recent years,” analysts led by William Foster wrote in a report Monday.

In the wake of the Federal debt ceiling “brinkmanship” earlier this year, “a government shutdown would demonstrate the significant constraints that intensifying political polarization continue to put on US fiscal policymaking during a period of declining fiscal strength, driven by persistent fiscal deficits and deteriorating debt affordability,” Moody’s added.

Markets have been on watch for further credit actions after Fitch Ratings downgraded the US earlier this year, citing concerns about political wrangling over the debt ceiling that took the nation to the brink of a default. Moody’s latest report — which leaves its rating of the US unchanged — is a sign that US debt sustainability and the politics around it will continue to be a theme through the remainder of the year.

The report comes as Congress struggles to pass a short-term spending bill required to stop a government shutdown when the new US fiscal year begins in October. Some of the holdouts have cited Fitch’s downgrade, and the company’s concerns about the size of US debt, while overlooking its criticism of the brinkmanship associated with the debt ceiling.

Moody’s said a shutdown’s effect “would be concentrated in areas with a large government presence and depend on the duration of the closure.”

Treasury yields remained higher on the day in the wake of Moody’s report with 10-year yields earlier reaching their highest since 2007.

--With assistance from Erik Wasson.

(Updates with context from fourth paragraph)