US rating still at risk despite reduced threats from DC
The country has retained its top triple-A rating from Moody's Investors Service and Fitch Ratings, despite rising debt levels. It was downgraded by one notch in 2011 by Standard & Poor's after a chaotic debt ceiling battle. On Monday, Fitch said the recent debt ceiling extension eliminates the immediate risk to the rating.
But going forward, the emerging signs of lawmakers working together are not likely to be enough to head off more downgrades of US government debt, which is used as a benchmark for borrowing costs and considered the safest of safe havens.
There is no exact formula for what will trigger a downgrade, but statements and reports released by the agencies give some clues. Specifically, the US debt-to-GDP ratio, currently at about 68 percent, is better than triple-A rated nations such as Canada, but far worse than Australia or Norway.
"The negotiations for the medium-term deficit and debt trajectory are the most important things in our ratings," said Steven Hess, lead US sovereign credit analyst at Moody's Investors Service.
"We're looking for a convincing downward trajectory in the debt ratios and we don't think that that's yet there."
The US government has jumped from crisis to crisis in recent years, beginning with the 2011 debt ceiling battle, followed by the threat of the "fiscal cliff" of
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