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Ratings agency Moody's the affirms US's top-notch credit rating

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People sit outside the New York Stock Exchange (NYSE) in New York City, September 15, 2016. Brendan McDermid/Reuters

  • Ratings agency Moody's maintained the US's top-notch "Aaa" credit rating.
  • It gave the US a stable outlook, citing its "exceptional" economic strength.
  • Moody's said it expects US federal budget deficits to widen over the medium term, but that the country's strong economy and strong institutions would counterbalance lower fiscal strength.
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Ratings agency Moody's on Wednesday maintained the United States' top-notch "Aaa" credit rating, saying the country's "exceptional" economic strength would counterbalance lower fiscal strength.

The ratings agency also maintained its stable outlook on the United States.

Massive tax cuts signed into law in December, which Republicans said would pay for themselves, will balloon the US deficit in years ahead, the Congressional Budget Office said on April 9.

Moody's said it expects US federal budget deficits to widen over the medium term, but that the country's strong economy and strong institutions would counterbalance lower fiscal strength.

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"The diversity, dynamism, and competitiveness of the US economy, along with the US dollar's status as the pre-eminent international reserve currency and very large size and depth of the US Treasury market, offset rising fiscal pressures stemming from aging-related entitlement spending, higher debt service payments, and recent policy actions that will likely reduce future revenues and increase expenditures," Moody's said in a statement.

Standard & Poor's is the only one of three major US bond agencies that does not currently assign the top-notch AAA-rating to the world's biggest economy.

In August 2011, S&P stripped the United States of its coveted top rating over a debt ceiling showdown in Washington, citing “political brinkmanship” during the debate over raising the government’s legal borrowing limit.

(Reporting by Noel Randewich; Editing by Dan Grebler)

Read the original article on Reuters. Copyright 2018. Follow Reuters on Twitter.
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