Moody’s Investors Service has changed the outlook of the United States' debt to negative, increasing the chances of a credit rating downgrade. The nation's fiscal deficits and extreme partisanship in Washington were cited as key factors.
The United States is one step closer to losing its last perfect credit rating after Moody’s Investors Service changed the outlook of the nation’s debt to negative on Friday after markets closed. While the move does not automatically mean it will downgrade America’s creditworthiness, it increases the chances.
Even the prospect of a US downgrade could hurt Americans’ investment portfolios, make it even more expensive for them to borrow money, and make it more costly for the government to pay off its debts. These effects would likely be even more painful if Moody’s does eventually downgrade the US debt. The nation’s diminished fiscal strength, undone by extreme partisanship in Washington, was a key driver of the action, according to a statement from Moody’s. ”In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability,” the statement sai
Moody's United States Debt Credit Rating Outlook Downgrade Fiscal Deficits Partisanship
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