Moody’s changes US credit outlook to negative as shutdown looms

The White House blamed the change on the Republican.

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Moody's changes US credit outlook to negative as shutdown looms - File Picture
Moody's changes US credit outlook to negative as shutdown looms - File Picture

WASHINGTON — Moody’s Investors Service lowered its outlook of United States’ debt from stable to negative on Friday, saying the risks to the country’s fiscal strength have increased with higher interest rates and rising debt costs.

While the US still maintains its AAA rating, the country is one step closer to losing its perfect credit rating, reported United Press International (UPI).

The change comes as the Congress faces another deadline next week to fund the government and prevent a shutdown.

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 agency said.

Continued political polarisation within US Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability, it added.

The White House blamed the change on the Republican.

Moody’s decision to change the US outlook is yet another consequence of Congressional Republican extremism and dysfunction, press secretary Karine Jean-Pierre said.

In the past few months, Fitch Ratings and S&P Global — the two other major ratings agencies — downgraded US creditworthiness in the wake of threatened government shutdowns. — Bernama-UPI