America

Joining Fitch, Moody's Also Affirms U.S. Credit Rating

Echoing what Fitch Ratings said yesterday, Moody's Investor Service said it is keeping a triple-A credit rating for the United States. Bloomberg reports that the announcement also came with a warning that a downgrade is still possible if the country doesn't take on debt reduction:

The outlook for the U.S. grade is now negative, Moody's said in a statement yesterday after President Barack Obama signed into law a plan to lift the nation's borrowing limit and cut spending following months of wrangling between Democratic leaders and Republican lawmakers.

The compromise "is a positive step toward reducing the future path of the deficit and the debt levels," Steven Hess, senior credit officer at Moody's in New York, said in a telephone interview yesterday. "We do think more needs to be done to ensure a reduction in the debt to GDP ratio, for example, going forward."

During the debt ceiling debate, all three major ratings agencies warned the U.S. that if it did not raise the debt ceiling and enact a deficit-cutting budget, it faced a downgrade of its triple-A credit rating.

Now, the only agency that hasn't made a statement after the budget deal was enacted by President Obama, yesterday, is S&P.

Update at 7:54 p.m. Chinese Agency Cuts U.S. Rating:

Dagong Global Credit Rating, which Reuters calls a "a relative newcomer to sovereign debt rating realm and little known outside of China," announced that it was downgrading the United States' rating from A-plus to A. Reuters reports:

It said the deal reached by Congress and signed into law by President Barack Obama may further erode the country's debt paying ability in the coming years, and the agency issued a negative outlook for the United States.

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