U.S. Faces Potential Credit Rating Downgrade Amidst Debt Crisis and Pending Government Shutdown
Looking ahead, the next major macro event that traders will be watching closely for clues on the markets next big move will be the pending U.S government shutdown – unless a federal budget for the next fiscal year is approved by Congress and signed by the President before November 17.
America’s alarming debt crisis is once again taking front and centre stage again after the credit rating agency Moody’s lowered its outlook on the U.S government’s credit ratings to “negative” – citing the cost of rising interest rates and political polarization in Washington has significantly increased downside risks to the country’s economic and fiscal strength.
While Moody’s has not officially downgraded the United States’ credit rating just yet – the move presents another black mark for the economy.
Back in 2011, Standard and Poor’s downgraded the United States after months of political brinkmanship over the nation’s debt ceiling. More recently in August this year – Fitch Ratings also downgrading the U.S credit rating from AAA to AA+ after the United States narrowly avoided defaulting on its debt for the first time in history.
And now the Moody’s negative outlook has made it more likely that the world’s largest economy is on the way to losing its last AAA rating.
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