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Friday, Moody’s notes announced that this had demoted American credit note By a notch due to persistent budgetary deficits which he considers to be deteriorating in the future.
The demotion puts the American credit note downwards from AAA to AA1 on the rating scale of Moody’s 21-Notch. The company has also changed its prospects for the United States, from negative to stable.
Moody’s said that demotion “reflects the increase of more than a decade public debt And the payment ratios of interest at levels which are much higher than similar noted sovereigns. “”
The demotion puts the American credit note downwards from AAA to AA1 on the rating scale of Moody’s 21-Notch. (Reuters / Kevin Lamarque / Reuters)
CBO says that American budget deficits to expand, national debt to increase to 156% of GDP
“Administrations and successive congresses and the congress did not understand the measures aimed at reversing the trend of major annual budgetary deficits and increasing interest costs,” said the company. “We do not think that the multi -year material reductions in compulsory expenses and deficits will result from current tax proposals considered.”
Moody’s said that aggravation of tax perspectives and a lack of will to stabilize the deficit led to the decision. (Saul Loeb / AFP via Getty Images / Getty Images)
Moody’s added that he sees the budgetary prospects of the federal government aggravating in the years to come, with Expenses in law programs Like health insurance and social security which continue to increase in the midst of the aging of the American population and payments of interest on debt increasing due to higher interest rates and the widening of deficits.
“During the next decade, we expect greater deficits as rights expenditure increases while government revenues remain largely stable. In turn, persistent tax deficits allowed government debt and the burden of interest.
The Treasury Department is seen in Washington, DC, August 29, 2022. ((Photo of Daniel Slim / AFP via Getty Images) / Getty Images)
Although he has downgraded the American credit rating of a level, Moody’s also changed his prospects of “negative” to “stable” in conjunction with the movement, explaining that he reflects “balanced risks” at level AA1.
“The United States retains exceptional credit forces such as the size, resilience and dynamism of its economy and the role of US dollar As a global reserve currency, the company explained. “In addition, while the last months have been characterized by a degree of political uncertainty, we expect the United States to continue its long history of very effective monetary policy led by an independent federal reserve.”
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Demotion occurs as president Donald Trump Friday, the bill on scanning taxes failed to erase a key procedural obstacle, while the Républicains of the hard line demanding reductions in deeper spending blocked the measure in a rare political setback for the Republican President at the Congress.
The Cup follows a degradation of Rival Fitch, which, in August 2023, also reduced the sovereign note of the United States of a notch, citing an expected budgetary deterioration and repeated negotiations of the debt towards the thread which threaten the government’s ability to pay its bills.
Reuters contributed to this report
