Moodys warns against the deterioration of prospects for American public finances

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The Moodys credit rating group warned against American tax perspectives, saying that President Donald Trumps, the commercial prices could hinder the country's ability to cope with a bunch of increasing debt and higher interest rates.

The rating agency said on Tuesday that the fiscal force of the Americas is on the right track for a continuous drop of several years, having already deteriorated because it has allocated a negative perspective to the AAA credit rating of the Americas in November 2023.

While Moodys highlighted the extraordinary economic resilience of the United States and the role of the dollar and the treasury market as a backbone of the global financial system, its analysts also warned Tuesday that the policies of the second Trump administration, including prices and tax reduction plans for government income.

The negative potential impact of the credit of high prices supported, unsuccessful tax reductions and significant risks of the tail for the economy have reduced the prospects that these formidable forces will continue to compensate for the widening of tax deficits and the decrease in debt affordability, said Moodys.

In fact, a budgetary weakening will probably persist even in very favorable economic and financial scenarios, they added.

Moodys Warning comes in the middle of a furious debate on Capitol Hill and within the Trump administration on how to place the United States on a more sustainable tax path. Analysts and investors have warned that the rapid increase in debt and deficit could ultimately lower the demand for treasury bills, which form the basis of the global financial system.

Pimco, one of the largest bond managers in the world, said at the end of last year that sustainability issues had hesitated to buy long -term treasury bills. The federal budget deficit reached $ 1.8 TN for the financial year ending on September 30, up 8% compared to the previous year.

When Moodys has reduced his prospects on the USS to negative credit rating just over two years ago, he highlighted debt costs and rooted political polarization. The credit rating of the Americas is closely monitored because it plays an essential role in the affordability of countries debt with higher notes and positive perspectives generally resulting in lower borrowing costs.

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Moodys said on Tuesday that the affordability of the American debt remains significantly lower than for other classified and very well rated sovereigns, even the most positive economic and financial scenarios highlighting the growing risks according to which the deterioration of American budgetary force can no longer be completely offset by its extraordinary economic force.

The rating agency conceded that it expected the greatest economy in the world to remain strong and resilient. But his analysts have added that the evolution of the American government policies on trade, immigration, taxes, federal spending and regulations could reshape certain parts of the American and global economy with significant long -term consequences.

While Trump has repeatedly indicated his preference for borrowing costs in the lower United States, the Fed last week has stable interest rates in a range of 4.25% to 4.5%, its decision-makers predicting approximately two quarter-point drops in 2025. Moodys announced a federal fund of 3.75% to 4% at the end of the year.

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