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Standard and Poors rating agency affirmed that the US sovereign ratings remain 'AA+/A-1+' and the outlook remains stable. The US is thundering to increasingly massive debt levels since the global pandemic. The S&P says sovereign stability is based on strong American institutions, a diversified and resilient economy, extensive monetary policy flexibility.

US Dollar Rolls

The agency added that the sovereign rating on US is also based on the nations unique status as the issuer of the world's leading reserve currency.  The S&P concluded that the stable outlook on US indicates view that negative and positive rating factors for the US will be balanced over the next three years

In what many may call wishful thinking the S&P also expects US's institutional checks, balances, strong rule of law, free flow of information to contribute to stability in economic policies

Headlines 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

Source: Reuters. S&P

From The TradersCommunity News Desk

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