© Reuters. A man is seen in silhouette near flowers at an office building in the financial district of New York City, U.S., June 14, 2023. REUTERS/Shannon Stapleton/File Photo
(Reuters) – Moody’s (NYSE:) on Friday changed the outlook on the government of United States of America’s ratings to “negative” from “stable”.
The rating agency said it expects United States’ fiscal deficits will remain very large, significantly weakening debt affordability.
Moody’s affirmed the long-term issuer and senior unsecured ratings at “Aaa”.
COMMENTS:
STEVEN RICCHIUTO, U.S. CHIEF ECONOMIST, MIZUHO SECURITIES USA LLC, NEW YORK
“The behavior that’s taking place on Capitol Hill in terms of not dealing with the fiscal situation when you’ve got a $1.5 trillion structural deficit is clearly a problem that will be reflected in terms of the market.
“I think it was a mistake for them to do it on a Friday afternoon because that means the first market that is going to react to it is Japan. The Japanese are significant holders of U.S. debt and it’s a much less liquid market. Therefore, you could wind up with a bit more of an outside immediate response in the overseas market come Sunday night.”
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