Moody’s on Friday downgraded its outlook for the U.S. debt from stable to negative, a week before crucial budget negotiations in Congress.
At this time, the agency maintains its rating on U.S. government debt at Aaa.
“Without an effective fiscal policy to reduce government spending or increase revenue as interest rates rise…
Moody’s on Friday downgraded its outlook for the U.S. debt from stable to negative, a week before crucial budget negotiations in Congress.
At this time, the agency maintains its rating on U.S. government debt at Aaa.
“With rising interest rates, and without effective fiscal policy measures to reduce government spending and increase revenue, we expect the U.S. budget deficit to remain very high and our ability to service our debt to be significantly impaired,” Moody’s said. “I am doing so,” he said.
The US Treasury Department immediately expressed its opposition to Moody’s decision.
“The U.S. economy remains strong and Treasury securities are among the safest and most liquid assets in the world,” Deputy Treasury Secretary Wally Adeyemo said in a statement.
Advertisement – SCROLL TO CONTINUE
“The Biden administration is committed to achieving fiscal sustainability through the over $1 trillion deficit reduction included in June’s debt limit agreement and President Biden’s budget proposal that reduces the deficit by nearly $2.5 trillion over the next 10 years. They have shown a commitment to sexuality.”
It was announced last month that the US budget deficit for fiscal year 2023 (ending September 30) has widened to $1.7 trillion.
The U.S. central bank’s interest rate hikes aimed at curbing inflation have ballooned the cost of U.S. debt, with Washington paying $162 billion more in interest last year than in 2022.
Advertisement – SCROLL TO CONTINUE
Moody’s is the only major agency to keep U.S. government debt ratings at the highest level, with failure to reach an agreement to keep government funding within a week highlighting the potential economic danger to the U.S. There is.
Neither the Democratic-controlled Senate nor the Republican-controlled House have passed legislation to extend government funding, which is set to expire at midnight next Friday, through Saturday.
Without a deal by Nov. 17, the world’s largest economy will enter a so-called government shutdown.
vmt/dth/acb/cwl