LONDON/NEW YORK (Reuters) - The United States may lose its triple-A debt rating if next year's budget negotiations do not produce policies that over time decrease the country's debt, Moody's Investors Service said on Tuesday.
"If those negotiations lead to specific policies that produce a stabilisation and then downward trend in the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable," Moody's said in an emailed statement.
"If those negotiations fail to produce such policies, however, Moody's would expect to lower the rating, probably to Aa1."
Rival ratings agency Standard & Poor's stripped the United States of its top ratings last year after Congress failed to come up with a long-term deficit reduction plan and political fighting brought the country to the brink of default.
The U.S. dollar fell after the announcement, with the euro spiking to a four-month high.
Moody's rates the United States Aaa but has the country on negative outlook. That probably won't change until after Congress concludes budget talks next year, it said. |