S&P affirms the US sovereign rating at AA+, says the outlook remains stable

Standard and Poors rating agency confirms Australia is higher rated than the US πŸ˜‰

 

  • US ‘AA+/A-1+’ sovereign ratings affirmed; outlook remains stable
  • S&P says sovereign rating on the US is based on its strong institutions, diversified and resilient economy, extensive monetary policy flexibility
  • says sovereign rating on US is also based on unique status as the issuer of the world’s leading reserve currency
  • says stable outlook on US indicates view that negative and positive rating factors for the US will be balanced over the next three years
  • S&P also expect US’s institutional checks, balances, strong rule of law, free flow of information to contribute to stability in economic policies

 

More (these headline summary points are via Reuters)

  • outlook for US remains stable, reflecting expectation of rapid economic growth this year and next as the pandemic recedes
  • says ratings for US are constrained by high general government debt and fiscal deficits, both of which worsened in 2020
  • expect gradual withdrawal of unprecedented US fiscal stimulus to stabilize net general govt debt burden around 110% of GDP in next couple of years
  • says US dollar’s status as world’s premier reserve currency, and size and depth of the US financial market, should sustain policy flexibility
  • says expect US govt will enact countervailing measures to begin addressing longer-term fiscal challenges
  • ratings for US are constrained by fiscal weaknesses and high net general government debt, which is expected to reach 107% of GDP in 2021
  • says rapid economic policy response to pandemic illustrates the ability of u.s. governing institutions to undertake timely measures during crisis
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