WASHINGTON (AP) \u2014 The credit rating agency Moody\u2019s Investors Service lowered its outlook on the U.S. government\u2019s debt on Friday to \u201cnegative\u201d from \u201cstable,\u201d citing the cost of rising interest rates and political polarization in Congress.<\/p>\n\n\n\n
Moody\u2019s retained its top triple-A credit rating on U.S. government debt, though it is the last of the three major credit rating agencies to do so. Fitch Ratings lowered\u00a0its rating to AA+ from AAA in August, and Standard & Poor\u2019s downgraded the U.S. in 2011. A reduced outlook, however, raises the risk that Moody\u2019s could eventually strip its triple-A rating from the U.S. as well.<\/p>\n\n\n\n
A lower rating on U.S. debt could cost taxpayers if it leads borrowers to demand higher interest rates on Treasury bills and notes. The yield on the 10-year Treasury has risen significantly since July, from about 3.9% to 4.6% Friday, an unusually sharp rise.<\/p>\n\n\n\n
Some market analysts have said the August Fitch downgrade may have contributed to that increase, though most point to other factors as bigger drivers, such as the Federal Reserve\u2019s commitment to keeping its benchmark rate at a 22-year high to battle inflation.<\/p>\n\n\n\n
\u201cIn the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody\u2019s expects that the U.S.’s fiscal deficits will remain very large, significantly weakening debt affordability,\u201d the agency said in a statement.<\/p>\n\n\n\n
The Biden administration criticized Moody\u2019s decision.<\/p>\n\n\n\n
\u201cWhile the statement by Moody\u2019s maintains the United States\u2019 Aaa rating, we disagree with the shift to a negative outlook,\u201d Deputy Treasury Secretary Wally Adeyemo said. \u201cThe American economy remains strong, and Treasury securities are the world\u2019s preeminent safe and liquid asset.\u201d<\/p>\n\n\n\n
The federal government\u2019s budget deficit jumped to $1.7 trillion in the budget year that ended Sept. 30, up from $1.38 trillion the previous year. Analysts have warned that with interest rates heading higher, interest costs on the national debt will eat up a rising share of tax revenue.<\/p>\n\n\n\n
Separately, congressional lawmakers\u00a0left Washington for the weekend\u00a0without a plan to avoid a potential government shutdown that could occur by Nov. 17. Moody\u2019s cited congressional dysfunction as one reason it lowered its outlook on U.S. debt.<\/p>\n\n\n\n
\u201cRecently, multiple events have illustrated the depth of political divisions in the U.S.: Renewed debt limit brinkmanship, the first ouster of a House Speaker in U.S. history, prolonged inability of Congress to select a new House Speaker, and increased threats of another partial government shutdown,\u201d Moody\u2019s said.<\/p>\n","protected":false},"excerpt":{"rendered":"
WASHINGTON (AP) \u2014 The credit rating agency Moody\u2019s Inve […]<\/p>\n","protected":false},"author":1,"featured_media":2944,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-2943","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/www.viewworld.org\/index.php?rest_route=\/wp\/v2\/posts\/2943","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.viewworld.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.viewworld.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.viewworld.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.viewworld.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2943"}],"version-history":[{"count":1,"href":"https:\/\/www.viewworld.org\/index.php?rest_route=\/wp\/v2\/posts\/2943\/revisions"}],"predecessor-version":[{"id":2945,"href":"https:\/\/www.viewworld.org\/index.php?rest_route=\/wp\/v2\/posts\/2943\/revisions\/2945"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.viewworld.org\/index.php?rest_route=\/wp\/v2\/media\/2944"}],"wp:attachment":[{"href":"https:\/\/www.viewworld.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2943"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.viewworld.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2943"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.viewworld.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2943"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}