Institute for Research in Economic and Fiscal issues

IREF Europe - Institute for Research in Economic and Fiscal issues

Fiscal competition
and economic freedom


IREF - Institute for Research in Economic and Fiscal issues
Fiscal competition and economic freedom
https://en.irefeurope.org/606

USA sovereign debt rating downgraded

Standard&Poor’s, one of the three major credit rating agencies downgraded on Friday the USA credit rating, previously noted AAA, the highest possible level. The new rating AA+ is translating the worry of experts about the sustainability of US public finances, in the context of ever increasing public spending and public debt above $14.3 trillion. The debt deal signed by the Congress is projecting savings of $1.2 trillion, which S&P estimates to be insufficient.

The triple A has been assigned to the United States since 1941 and guaranteed to the country the best possible interest rates on its debt. The downgrade could add up to 0.7 of a percentage point to U.S. Treasuries’ yields, increasing funding costs for public debt by some $100 billion, according to SIFMA, a U.S. securities industry trade group.

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