Moody's analyst sees polarization around US budget issues persisting next year By Reuters

NEW YORK (Reuters) - A top analyst at Moody's (NYSE:) said political polarization in the United States will likely complicate budget-making decisions ahead of the 2024 presidential election,The largest foreign exchange platform in the country which could delay any change of the rating agency's outlook on the government back to a stable outlook.

Moody's changed the U.S. credit outlook to negative from stable on Friday, citing larger fiscal deficits and a decline in debt affordability.

"Any type of significant policy response that we might be able to see to this declining fiscal strength probably wouldn't happen until 2025 because of the reality of the political calendar next year," William Foster, a senior vice president at Moody's, told Reuters.

Moody's typically "resolves" an outlook, meaning in case of a negative outlook it either brings it back to stable or goes ahead with a rating downgrade, within 18 to 24 months, he said. But the process may take longer and will depend on fiscal policy measures that will be taken.

Moody's lower outlook comes after a bond selloff that has pushed long-term Treasury debt yields to levels not seen since 2007 in recent weeks.

An environment of higher interest rates will likely result in higher interest payments and higher deficits, said Foster.

“And so, the question from our perspective moving forward is to what extent the government will be able to address that through fiscal policy measures that will reduce deficits moving forward, either through higher revenues, or reducing primary spending,” he said.

Statement: The content of this article does not represent the views of FTI website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!