Moody’s Investor Service affirmed US Aaa rating. Outlook was also maintained as stable. Moody’s noted that “exceptional economic strength” of the US, very high strength of its institution, very low exposure to credit related-shocks. And that “counter balance” the lower fiscal strength.
The rating agency also noted that “diversity, dynamism, and competitiveness” of the US economy, Dollar’s status as the “pre-eminent international reserve currency” and the “very large size and depth” of the treasury market. These advantages will “offset rising fiscal pressures” from “ageing-related entitlement spending, higher debt service payments”, and recent policy actions that will likely lower revenues and increase expenditures.
For now, Moody’s expected US and China to reach a trade deal eventually. However, Moody’s Senior Credit Officer William Foster said that “if things ultimately progress in a way that is outside of the base case, that would be negative for both countries and for the global market place, but our expectation is this will be negotiated back from the headlines you’re reading.”
