Saturday, June 10, 2023

DBRS places the US’s “AAA” credit rating on review for a downgrade

LONDON (Reuters) – Credit rating agency DBRS Morningstar put the United States on a lean review on Thursday over debt negotiations in Washington, shortly after a similar warning from Fitch.

“A downward revision with negative consequences represents the risk that Congress will not raise or suspend the debt ceiling in a timely manner,” DBRS said in a statement. “If Congress does not act, the US federal government will not be able to pay all of its obligations.”

The move by DBRS follows a similar move by Fitch, which on Wednesday said the “AAA” rating for the United States was on negative watch, a precursor to possible steps if lawmakers fail to lift the government’s borrowing limit before it runs out of money; as soon as possible

Another agency, Scope Ratings, earlier this month downgraded the U.S. rating to “AA” due to possible downgrades due to long-term risks associated with the debt ceiling.

Negotiators for the Democratic president, Joe Biden, and the main Republican congressman, Kevin McCarthy, held what both sides described as “very productive talks” on Wednesday to try to reach an agreement that would lift the debt ceiling of 31.4 trillion dollars.

However, the June 1 notification has the Treasury fearing that it will not allow enough time to close the deal and avoid a disastrous default.

DBRS, which has a “AAA” rating for the United States, said it was still waiting for Congress to pay the debt deadline on time, but warned of the risk of “inaction by Congress” as the deadline nears.

He also warned that the outcome of the resolution of the perspective of the legislative meeting in a “polarized political environment” could lead to credit ratings.

Report by Marc Jones and Davide Barbuscia in Spanish edited by Carlos Serrano.

Nation World News Desk
Nation World News Desk
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