Madhya Pradesh News Tribune
Buisness

US credit rating might soon drop from its current AAA status

<p>Following the modification of the country’s debt outlook to negative by Moody’s Investors Service, the United States is now one step closer to losing its last flawless credit rating.<img decoding=”async” class=”alignnone wp-image-278295″ src=”https://www.theindiaprint.com/wp-content/uploads/2023/11/theindiaprint.com-us-credit-rating-might-soon-drop-from-its-current-aaa-status-download-2023-11-11t1.jpg” alt=”theindiaprint.com us credit rating might soon drop from its current aaa status download 2023 11 11t1″ width=”1358″ height=”904″ title=”US credit rating might soon drop from its current AAA status 3″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2023/11/theindiaprint.com-us-credit-rating-might-soon-drop-from-its-current-aaa-status-download-2023-11-11t1.jpg 275w, https://www.theindiaprint.com/wp-content/uploads/2023/11/theindiaprint.com-us-credit-rating-might-soon-drop-from-its-current-aaa-status-download-2023-11-11t1-150×100.jpg 150w” sizes=”(max-width: 1358px) 100vw, 1358px” /></p>
<p>According to CNN, although there is no guarantee that the action would result in the nation’s creditworthiness being downgraded, the likelihood is increased.</p>
<p>According to CNN, the mere possibility of a downgrade for the US may negatively impact Americans’ investment portfolios, increase the cost of borrowing for them, and increase the cost for the government to settle its obligations.</p>
<p>If Moody’s were to downgrade the US debt at some point, these consequences would probably be far more severe.</p>
<p>A statement from Moody’s said that a major motivator for the decision was the country’s weakened budgetary position, which was caused by severe divisiveness in Washington, CNN reported.</p>
<p>“Moody’s expects the US to maintain very large fiscal deficits, significantly weakening debt affordability in the context of higher interest rates, in the absence of effective fiscal policy measures to reduce government spending or increase revenues,” the statement said.</p>
<p>US government representatives resisted the action, citing the US Treasury’s liquidity as one of the main reasons.</p>
<p>In a statement, Wally Adeyemo, the deputy secretary of the Treasury, said, “We disagree with the shift to a negative outlook.”</p>
<p>“The world’s most reliable and liquid asset is Treasury securities, and the American economy is still strong.”</p>
<p>According to CNN, Moody’s is the only one of the three major credit rating agencies to give the US an exceptional AAA rating, which it has had since 1917.</p>
<p>2011 saw the US downgraded for the first time by Standard & Poor’s due to the debt limit stalemate.</p>
<p>Following the most recent debt limit fight, Fitch Ratings downgraded America’s credit rating in August, CNN reported.</p>
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