The rating agency Moody’s reacts to the uncertainty surrounding debt affordability in the USA.
The US rating agency Moody’s could soon take away its previous top rating for the United States. The agency announced late on Friday evening (CET) that the outlook for the country had been changed from “stable” to “negative”. The previous top rating of “AAA” was confirmed once again.
Moody’s said the main reason for the measure was that the downside risk to US financial strength had increased. In a rising interest rate environment without effective measures to reduce government spending or increase revenues, the US deficit is likely to remain very large, it said. This is likely to noticeably weaken debt affordability.
Moody’s is currently the only one of the three major rating agencies that still gives the USA the best rating. Fitch and S&P see the United States as one notch below prime, but each with a stable outlook.
Source: Stern
