The United States my lose its AAA rating if it can not control its deficit hike, rating agency Moody’s Investors Service warned on Thursday. Steven Hess, Moody’s lead analyst for the United States, said in a TV interview that the AAA rating of the United States is “not guaranteed.” He said if the US deficit does not drop to a sustainable level in the next three to four years, the US rating will be “in jeopardy.” The US government posted a record deficit of US$1.417T in the FY ended Sept. 30. Stimulus package to combat the severe recession and a series of bailout rescues to banks and automakers have put a heavy burden on government spending. The Obama Administration has predicted that deficits would top US$1T through FY 2011. Currently Moody’s has a stable outlook on the US rating, an indication that there will not be a change in the next 18 months.
Also Thursday, Moody’s said European countries’ rising debt won’t trigger across-the-board credit-rating downgrades as countries are measured relative to each other. Earlier this year, Standard & Poor’s lowered its outlook on Britain from stable to negative, causing unrest in global equity markets.
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