Moody's Downgrades US Debt Outlook to Negative, Warns of Rising Default Risk
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Moody's downgraded the outlook on US debt from "stable" to "negative" due to large fiscal deficits and weakening debt affordability.
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The rating agency warned that continued political polarization poses a risk of Congress being unable to reach consensus on fiscal plans.
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Moody's maintained the US's AAA rating but warned it may be cut in the future.
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The downgrade follows similar moves by Fitch and Standard & Poor's, with interest costs now equating to 40% of income tax revenue.
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An expert says US Treasuries are "no longer safe" with the government at risk of either missing bond payments or inflating away its debts.