Ketaan Ram Kataria
New Delhi: Global credit rating agency Moody’s has revised its outlook on the United States government’s credit rating from “stable” to “negative,” citing concerns over rising federal debt and interest payment burdens. While the U.S. retains its top-tier “Aaa” rating, the outlook change signals growing unease over the country’s fiscal trajectory.
In its assessment, Moody’s pointed to “continued political polarization” in Washington as a key risk factor undermining effective fiscal policymaking.
The agency warned that without significant reforms or fiscal consolidation measures, the federal government’s debt affordability will continue to deteriorate in the coming years.
Moody’s is the last of the “Big Three” credit rating agencies to maintain a top rating for the U.S., after Fitch downgraded the nation’s rating from AAA to AA+ earlier this year. S&P had also cut its rating in 2011 following a political deadlock over the debt ceiling.
In response, the U.S. Treasury Department defended the country’s economic standing, asserting that the American economy remains resilient, with robust GDP growth and a strong labor market. Treasury officials emphasized the importance of responsible fiscal governance and urged Congress to take bipartisan action to address long-term budget challenges.
The revision in outlook has heightened scrutiny on U.S. fiscal policy ahead of the 2024 elections, as concerns over federal debt sustainability and political gridlock intensify.
