Posted on Nov 11, 2023
Moody’s cuts U.S. outlook to negative, citing deficits and political polarization
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Moody’s Investors Service on Friday lowered its ratings outlook on the United States’ government to negative from stable, pointing to rising risks to the nation’s fiscal strength.
The ratings agency has affirmed the long-term issuer and senior unsecured ratings of the U.S. at Aaa.
“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues,” the agency said. “Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.”
The ratings agency has affirmed the long-term issuer and senior unsecured ratings of the U.S. at Aaa.
“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues,” the agency said. “Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.”
Moody’s cuts U.S. outlook to negative, citing deficits and political polarization
Posted from nbcnews.com
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PO1 William "Chip" Nagel
..."Moody's move to cut its outlook arrives as Congress faces the looming threat of a government shutdown once more. For now, the government is funded through Nov. 17, but lawmakers in Washington remain at loggerheads over a bill ahead of the deadline.
Newly elected House Speaker Mike Johnson (R-La.) has indicated that he will release a Republican government funding plan on Saturday, a move that would permit members time to read it before an expected Tuesday vote on the measure.
But his plan to fund certain parts of the government through Dec. 7, and other parts through Jan. 19, known as a laddered continuing resolution, or CR, is dead on arrival in the White House and in the Democratic-controlled Senate.
"Moody's decision to change the U.S. outlook is yet another consequence of Congressional Republican extremism and dysfunction," White House press secretary Karine Jean-Pierre said in a statement.
Back in August, Fitch cut the U.S. long-term foreign currency issuer default rating to AA+ from AAA, citing "expected fiscal deterioration over the next three years," as well as an erosion of governance and a growing debt burden.
Feuding in Washington was also an issue. "The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management," Fitch said at the time."...
..."Moody's move to cut its outlook arrives as Congress faces the looming threat of a government shutdown once more. For now, the government is funded through Nov. 17, but lawmakers in Washington remain at loggerheads over a bill ahead of the deadline.
Newly elected House Speaker Mike Johnson (R-La.) has indicated that he will release a Republican government funding plan on Saturday, a move that would permit members time to read it before an expected Tuesday vote on the measure.
But his plan to fund certain parts of the government through Dec. 7, and other parts through Jan. 19, known as a laddered continuing resolution, or CR, is dead on arrival in the White House and in the Democratic-controlled Senate.
"Moody's decision to change the U.S. outlook is yet another consequence of Congressional Republican extremism and dysfunction," White House press secretary Karine Jean-Pierre said in a statement.
Back in August, Fitch cut the U.S. long-term foreign currency issuer default rating to AA+ from AAA, citing "expected fiscal deterioration over the next three years," as well as an erosion of governance and a growing debt burden.
Feuding in Washington was also an issue. "The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management," Fitch said at the time."...
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