Moody's cuts US outlook to ‘negative’, Washington is furious (2024)

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Moody's cuts US outlook to ‘negative’, Washington is furious? ›

Why Moody's cut outlook on US credit rating. Moody's Investors Service has changed the outlook of the US debt to negative after markets closed on Friday. According to the rating agency, the diminished fiscal strength of the US, undone by extreme partisanship in Washington, was a key driver of the action.

As Moody's lowers the US credit outlook, what could this mean for consumers in the future? Moody's, a leading risk assessment agency, has lowered the United States government's credit ratings outlook from "stable" to "negative," citing political polarization in Congress.

Nov 10 (Reuters) - Moody's on Friday changed the outlook on the government of United States of America's ratings to "negative" from "stable". The rating agency said it expects United States' fiscal deficits will remain very large, significantly weakening debt affordability.

Some of the top examples include Australia, Canada, Denmark, Germany, Sweden, Switzerland, Norway, and Hong Kong. These are all countries that generally carry a credit rating of AAA.

The ratings could be downgraded if credit performance deteriorates meaningfully relative to through-the-cycle expectations. The emergence of evidence of further challenges in governance, oversight, risk management and internal controls could also trigger a downgrade.

A Moody's rating outlook is an opinion regarding the likely direction of a rating over the medium term.

New York, November 10, 2023 -- Moody's Investors Service (Moody's) has today changed the outlook on Government of United States of America's (US) ratings to negative from stable and affirmed the long-term issuer and senior unsecured ratings at Aaa.

A negative outlook in a credit rating signifies that there is a higher probability of a rating downgrade in the medium term. This outlook is assigned by rating agencies when they identify factors or risks that could weaken the issuer's credit profile or financial strength over time.

Rating Action:

New York, November 10, 2023 -- Moody's Investors Service (Moody's) has today changed the outlook on Government of United States of America's (US) ratings to negative from stable and affirmed the long-term issuer and senior unsecured ratings at Aaa.

Moody's Lowers U.S. Credit Rating to Negative, Citing Large Federal Deficits.

What is China's credit rating? ›

While it lowered its ratings to negative outlook from "stable", indicating a downgrade is possible over the medium term, Fitch affirmed China's issuer default rating at 'A+', its third-highest category. S&P, the other major global rating agency, also rates China A+, the equivalent of Moody's current A1 rating.

The China social credit system rates individuals based on the aggregation and analysis of data. In some trials, this has involved a single numerical score (usually between 1 and 1000, like a FICO score), or a letter grade (usually from A-D).

Home / Economy / Articles / What is the US credit rating, and what does its downgrade mean? On August 1, 2023, Fitch Ratings, one of the country's three major credit rating agencies, announced that it had downgraded the US credit rating from AAA to AA+.

Republic First Bank, a regional lender based out of Philadelphia, became the first bank failure of 2024 on Friday when it was shut down by Pennsylvania's bank regulator and the Federal Deposit Insurance Corp. (FDIC) seized control of the operation.

The unexpected collapses of three banks - Silicon Valley and Signature in March 2023 and First Republic in May - put a spotlight on how lenders managed risks to assets and liquidity as the Federal Reserve raised interest rates aggressively to bring surging inflation under control.

Moody's Investors Service cut its outlook for the US banking system to negative from stable, citing the run on deposits at Silvergate Capital Corp., SVB Financial Group's Silicon Valley Bank and Signature Bank that led to the three lenders' collapse in less than a week.

Moody's had downgraded the outlook to negative from stable in March last year when Bangladesh went for the IMF loan programme. Moody's in its latest outlook mentioned that the economy's operating environment would deteriorate as economic growth slows and inflation remains elevated.

Given the review for downgrade, an upgrade of U.S. Bancorp's ratings is unlikely in the next 12 to 18 months. The BCA and ratings could be confirmed if U.S. Bancorp's capital continues to strengthen at an accelerated pace and Moody's believes it will remain on an upward trajectory.

The credit ratings agency bumped up its chemical outlook from “negative” to “stable.” It expects the chemical sector's profits before taxes to decline by 9% during 2023 and return to 2022 levels next year. Prices for commodity chemicals have stabilized after a sharp drop in the second half of 2022.