While the presidential campaign has given new meaning to the concept of unpredictability and instability, one thing it won’t shake is the U.S. credit standing, according to one major ratings service.
In a report issued Monday, Moody’s Investors Service said the nation will maintain its pristine rating no matter who wins the hotly contested race.
“The election outcome will not affect the U.S.’s Aaa stable rating,” analyst Sarah Carlson and others wrote. “The U.S. possesses substantial credit strengths, including a very large, flexible economy, and the status of the dollar and Treasury bond as global reserve currency and bond market benchmark.”
The U.S. has found out the hard way how political instability can affect creditworthiness.
Back in August 2011, Moody’s rival Standard & Poor’s shocked financial markets when it cut the U.S. rating from triple-A to AA+ in the wake of a budget deal that the agency said came up short in addressing debt and deficit issues. The move briefly shook up markets, with the S&P 500 initially plunging more than 6 percent on the news.
Moody’s did not cut its rating at the time, but later switched its outlook for the U.S. to “negative.”
via CNBC
