Uh oh: S&P and Moody's warn U.S. could lose AAA bond rating

The two biggest credt rating agencies on Wall Street are now warning that the U.S. could lose its top bond rating:

Two leading credit rating agencies on Thursday cautioned the U.S. on its credit rating, expressing concern over a deteriorating fiscal situation that they say needs correction.

Moody's Investors Service said in a report Thursday that the U.S. will need to reverse an upward trajectory in the debt ratios to support its triple-A rating.

“We have become increasingly clear about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the U.S., the likelihood of a negative outlook over the next two years will increase,” said Sarah Carlson, senior analyst at Moody's.

Standard & Poor's Corp. on Thursday also didn't rule out changing the outlook for its U.S. sovereign-debt rating because of the recent deterioration of the country's fiscal situation. The U.S. currently has a triple-A rating with a stable outlook at both agencies.

“The view of markets is that the U.S. will continue to benefit from the exorbitant privilege linked to the U.S. dollar” to fund its deficits, Carol Sirou, head of S&P France, said at a Paris conference Thursday. “But that may change. We can't rule out changing the outlook” on the U.S. sovereign debt rating in the future, she warned. She added the jobless nature of the U.S. recovery was one of the biggest threats to the U.S. economy. “No triple-A rating is forever,” she said.

No triple-A rating is forever? Yikes. As Kevin Williamson says, “Note to Washington: If you thought the Tea Party looked like an angry mob, wait until you see what happens when Social Security checks start bouncing.”

AAABeltway ConfidentialS&PUS

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Construction in the Better Market Street Project between Fifth and Eighth streets is expected to break ground in mid-2021.<ins></ins>
SFMTA board to vote on Better Market Street changes

Agency seeks to make up for slimmed-down plan with traffic safety improvements

U.S. Vice President-elect Kamala Harris speaks during an event to name President-elect Joe Biden’s economic team at the Queen Theater on Dec. 1, 2020, in Wilmington, Del. (Alex Wong/Getty Images/TNS)
Kamala Harris to resign from Senate

Bridget Bowman CQ-Roll Call Vice President-elect Kamala Harris will resign from the… Continue reading

A view of Science Hall at the City College of San Francisco Ocean campus on Thursday, Jan. 14, 2021. (Kevin N. Hume/S.F. Examiner)
CCSF begins search for next chancellor amid new challenges

‘It’s arguably the biggest single responsibility the board has,’ trustee says

Some people are concerned that University of California, San Francisco’s expansion at its Parnassus campus could cause an undesirable increase in the number of riders on Muni’s N-Judah line.<ins></ins>
Will UCSF’s $20 million pledge to SFMTA offset traffic woes?

An even more crowded N-Judah plus increased congestion ahead cause concern

U.S. House Speaker Nancy Pelosi (D-California) speaks during her weekly press conference on Capitol Hill on Thursday, Jan. 7, 2021 in Washington, D.C. Pelosi called for the impeachment of U.S. President Donald Trump a day after his supporters stormed the Capitol. (Yuri Gripas/Abaca Press/TNS)
Feds seeking woman whose ex says she stole Nancy Pelosi’s laptop during Capitol riot

Jeremy Roebuck The Philadelphia Inquirer Federal authorities have obtained an arrest warrant… Continue reading

Most Read