Moody's Downgrades U.S. Debt Outlook, But Yellen Points to Economic Strength
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Moody's changed its outlook on U.S. debt from "stable" to "negative" due to fiscal deficits and polarization. Yellen disagrees, citing economic strength.
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Yellen highlighted the fast recovery from recession, near historic low unemployment, reduced inflation, and high GDP growth.
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Moody's kept the U.S. Aaa rating but is the only major agency still giving a top rating after downgrades.
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Yellen acknowledged higher rates pose fiscal challenges but views U.S. debt as still the world's safest asset.
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The U.S. budget deficit hit $1.7 trillion in 2023, up from $1.38 trillion in 2022, raising debt sustainability concerns.