The rating agency Moody's said on Tuesday that the financial strength of the United States is on track to deteriorate in the coming years, due to the widening budget deficit and the declining capacity to support the debt burden.
The agency added in a report that the country's financial situation has further deteriorated since it lowered its outlook on the US credit rating in November 2023 from AAA to negative.
The report comes amid growing uncertainty in U.S. financial markets following the president's decision Donald Trump to impose punitive tariffs on key trading partners — a move that has sparked investor fears of rising inflationary pressures and a sharp economic slowdown, according to Reuters.
Moody's said: "Even in a favorable economic and financial scenario, the United States' capacity to support its debt remains lower than that of other AAA-rated countries."
Moody's is the last major rating agency to maintain its AAA rating on US sovereign debt, although it lowered its outlook for late 2023 due to the rising budget deficit and debt interest payments.
