Leading rating firms have warned the U.S. that its credit rating could be jeopardized if the country’s worsening fiscal situation is not corrected soon, according to The Wall Street Journal. On Thursday, Moody’s Investors Service and Standard & Poor’s echoed earlier cautionary statements, with Moody’s saying that the U.S. needs to reverse the upwards trend of debt ratios in order to keep a triple-A rating. Moody’s warned that failure to address the situation would lead to a higher “likelihood of a negative outlook over the next two years.”
The agencies support measures that would help balance the budget, in particular a plan from the National Commission on Fiscal Responsibility and Reform that includes Social Security reform, Medicare cutbacks, and elimination of certain tax deductions. Meanwhile, a report from the Commerce Department showed the U.S. deficit in trade of goods and services with the rest of the world contracted 0.3% in November, reaching $38.31 billion. The drop defied economists’ expectations for a moderate rise, and marked the smallest monthly gap since January 2010.
Click here to read the story on the rating warning from The Wall Street Journal.
Click here for coverage of the trade deficit, also from The Wall Street Journal.