Scope Ratings places US credit ratings under review for possible downgrade
Scope Ratings on Friday placed the United States of America's AA long-term issuer and senior unsecured debt ratings in local and foreign currency under review for a possible downgrade due to longer run risks associated with the misuse of the debt ceiling instrument, per Reuters.
Scope, the leading European credit rating agency per Reuters, said that recurrent debt-ceiling crises have resulted in phases of debt repayment distress for the US government, adding that the government is dependent on last-minute congressional action to ensure repayment of its debt in full and on time.
Key statements
A rise in political polarisation, divided government since November 2022 congressional elections and more elevated federal deficits over the forthcoming years are the other reasons Scope cited for the ratings review.
Scope also placed United States' S-1+ short-term issuer ratings in local and foreign currency under review for downgrade.
Rating agencies Moody's and Fitch both have a triple-A rating for the United States - the highest credit quality status they can assign to a borrower.
S&P Global's sovereign rating for the United States is 'AA+', the second highest rating by the agency.
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Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
