New York
CNN
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The United States is one step closer to losing its last perfect credit rating after Moody’s Investors Service changed the outlook of the nation’s debt to negative on Friday after markets closed.
While the move does not automatically mean it will downgrade America’s creditworthiness, it increases the chances.
The nation’s diminished fiscal strength, undone by extreme partisanship in Washington, was a key driver of the action, according to a statement from Moody’s.
”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 statement said.
“We disagree with the shift to a negative outlook,” Deputy Secretary of the Treasury Wally Adeyemo said in a statement. “The American economy remains strong, and Treasury securities are the world’s preeminent safe and liquid asset.”
Moody’s is the only one of the three major credit rating agencies to assign the United States an outstanding rating of AAA, which it has maintained since…
