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Credit outlook on the US government's debt lowered; economic performance in Virginia

The credit rating agency Moody’s Investors Service lowered its outlook on the U.S. government’s debt on Friday to “negative” from “stable,” citing the cost of rising interest rates and political polarization in Congress.

Moody’s retained its top triple-A credit rating on U.S. government debt, though it is the last of the three major credit rating agencies to do so. Fitch Ratings lowered its rating to AA+ from AAA in August, and Standard & Poor’s downgraded the U.S. in 2011. A reduced outlook, however, raises the risk that Moody’s could eventually strip its triple-A rating from the U.S. as well.

A lower rating on U.S. debt could cost taxpayers if it leads borrowers to demand higher interest rates on Treasury bills and notes.

“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody’s expects that the U.S.’s fiscal deficits will remain very large, significantly weakening debt affordability,” the agency said in a statement.

Check out the recent effects on the economy in Virginia.

Source: www.dailyprogress.com

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