Moody’s lifts US outlook to ‘stable’ from ‘negative’

WASHINGTON, USA – Ratings firm Moody’s raised its outlook on the United States on Thursday, July 18, to “stable” from “negative,” citing progress in putting the federal government’s debt on a more sustainable path.

Moody’s “today moved the outlook on the Aaa government bond rating of the United States back to stable, replacing the negative outlook that has been in place since August 2011,” the company said in a statement.

Moody’s also pointed out the top triple-A rating was still warranted on US sovereign debt.

Moody’s said the outlook upgrade reflected its view “that the federal government’s debt trajectory is on track to meet the criteria laid out in August 2011 for a return to a stable outlook.”

The improvement removed the downward pressure on the rating, it said.

“The US budget deficits have been declining and are expected to continue to decline over the next few years.

“Furthermore, the growth of the US economy, which, while moderate, is currently progressing at a faster rate compared with several Aaa peers and has demonstrated a degree of resilience to major reductions in the growth of government spending,” the company said.

For those reasons, Moody’s said, the US government’s ratio of debt to gross domestic product will fall more sharply through 2018 than the company had estimated when it downgraded the outlook nearly two years ago. – Rappler.com