Moody’s lowers outlook on US government’s debt to negative

The rating agency retained its top triple-A credit rating on US government debt.

The outlook on the US government’s debt has been lowered by Moody’s Investors Service to ‘negative’ from ‘stable’.
The cost of rising interest rates and congressional dysfunction were cited as the reasons.
Moody’s expects the US fiscal deficits to remain very large, significantly weakening debt affordability.
The US administration criticised the decision.

Such a lower rating could cost US taxpayers if borrowers start demanding higher interest rates on Treasury bills and notes, global newswires reported.

”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’s fiscal deficits will remain very large, significantly weakening debt affordability,” the rating agency said in a statement.

The US administration criticised Moody’s decision. ”While the statement by Moody’s maintains the United States’ Aaa rating, we disagree with the shift to a negative outlook,” deputy treasury secretary Wally Adeyemo said.

Fibre2Fashion News Desk (DS)