Moody’s downgrades US rating from stable to negative
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Rating agency Moody’s downgraded the outlook for the US credit rating from stable to negative. writes Reuters. The reason was the budget deficit and reduced debt availability.
“Continuing political polarization in the US Congress increases the risk that successive governments will not be able to reach consensus on a fiscal plan that aims to reduce debt affordability,” the agency said in a statement.
Federal spending and political polarization are causing investor concern, sending U.S. Treasury prices to their lowest level in 16 years.
Moody’s Senior Vice President William Foster told the publication that based on the political calendar, no decisive steps should be expected until 2025. The rating agency noted that a downgrade is possible in the medium term.
After the publication of the forecast, White House spokeswoman Karine Jean-Pierre said that this is one of the consequences of “Republican extremism” in Congress.
On August 1, the Fitch rating agency announced that it had downgraded the US long-term rating from AAA to AA+. The agency noted that the downgrade reflects the expected deterioration of the financial position over the next three years, a high and growing debt burden and weakening governance, as reflected in controversy over the debt limit and last-minute decisions. American indices reacted with a decline. S&P downgraded the country’s rating to AA+ back in 2011.
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