Moody’s Investors Service has indicated a potential downgrade of the US.s top credit rating. The downgrade is attributed to large fiscal deficits, a decline in debt affordability, and continued political polarization within the US Congress.
As the US still maintains an “AAA” rating for the moment, the credit rating agency’s downgrade reflects a growing concerns about the US government’s debt and its inability to handle fiscal responsibilities.
Without measures to cut spending or increase revenue, Moody’s warns, fiscal deficits could persist at a substantial level. This would significantly undermine debt affordability, especially in the face of increasing interest rates, crypto.news.com reported.
Moody’s decision comes after Fitch Ratings—considered one of three most significant rating agencies in the world (the others being Moody’s and Standard & Poor’s)—downgraded the country’s sovereign rating in August after months of political tension surrounding the US debt ceiling.
The downgrade shifted the US out of the category of nations with the highest credit ratings evaluated by Fitch, one of three firms assessing governments and companies’ ability to meet their financial commitments.