Moody’s Threatens To Downgrade U.S. Credit Rating Amid “Meaningful Fiscal Deterioration” (SPY)

ETF Daily News | 2/9/2018 | Staff
xhelloworld (Posted by) Level 4
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Nearly seven years later, with the US on the verge of another government shutdown and debt ceiling breach (with the agreement reached only after the midnight hour, literally) this time it is Warren Buffett’s own rating agency, Moody’s, which on Friday morning warned Trump that he too should prepare for a downgrade form the one rater that kept quiet in 2011. The reason: Trump’s – and the Republicans and Democrats – aggressive fiscal policies which will sink the US even deeper into debt insolvency, while widening the budget deficit, resulting in “meaningful fiscal deterioration.”

In short: a US downgrade due to Trumponomics is inevitable. And incidentally, with today’s 2-year debt ceiling extension, it means that once total US debt resets at end of day – unburdened by the debt ceiling – it will be at or just shy of $21 trillion.

Downgrade - Revision - Outlook - Negative - Months

We expect if not a full downgrade, then certainly a revision in the outlook from Stable to Negative in the coming months.

Here’s Moodys:

Credit - Profile - United - States - Aaa

The stable credit profile of the United States (Aaa stable) is likely to face downward pressure in the long-term, due to meaningful fiscal deterioration amid increasing levels of national debt and a widening federal budget deficit. However, the US economy is very strong, wealthy, dynamic and well diversified, and its role in the global financial system is unmatched. These factors help compensate for the impending fiscal weakness, Moody’s Investors Service says in a new report.

Moody’s has already indicated that rising entitlement costs and rising interest rates will cause the US’s fiscal...
(Excerpt) Read more at: ETF Daily News
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