Moody’s maintains US debt rating, but downgrades outlook

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Bankinter | Moody’s has maintained its US debt rating, but worsened the outlook. The credit rating agency maintains the rating at AAA, but changes the outlook to “negative” from “stable”. In its report Moody’s refers to the worsening fiscal situation and the polarisation of politics as long-term concerns for the US economy.

Assessment: Rising interest rates, the sharp increase in public debt and a polarised Congress that is unable to agree on measures to reduce the public deficit have led to Moody’s downgrading of the debt outlook. Republicans are demanding spending cuts to reduce the deficit. Democrats are proposing to cut the deficit by growing the economy and raising taxes on corporations and wealthy individuals. The federal government faces a possible shutdown next week if Democrats and Republicans fail to reach an agreement. In August Fitch downgraded its rating on US debt to AA+ from AAA.

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