Troubling times could be ahead in the economy as Moody’s Investors Service has downgraded the outlook of America’s debt from “stable” to “negative,” putting the nation’s perfect credit rating at risk.
In its official statement, Moody’s said “In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.”
The assessment is receiving pushback from some U.S. officials. Deputy Secretary of the Treasury Wally Adeyemo released a statement saying, “The American economy remains strong” – primarily citing the liquidity of US Treasuries.
Despite the downgrade, Moody’s has decided to keep in place the U.S.’s triple-A credit rating, at least for now.