Us Credit Rating Placed Under Review By Scope Ratings

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Us Credit Rating Placed Under Review By Scope Ratings

US Credit Rating Placed Under Review By Scope Ratings

On Friday, the USA's debt rating was placed under review by the Scope Ratings firm. According to sources, the firm is considering downgrading the US's rating since the county counties to raise its debt ceiling.

Scope Ratings is a leading credit rating agency from Europe and thus has a lot of influence in its specific sector. According to scope ratings, the US government is going through debt repayment distress, and the reason for this is the recurrent debt ceiling crisis.

Political Polarisation To Blame

According to experts, the recent elections have led to a divided government and more political polarization in the country.

In January, the United States of America touched its debt limit of $31.4 trillion. Ever since then, there's been a standoff between the two major political parties.

If the debt ceiling is not raised before June 1, the country will officially run out of money. As a result, the USA will not be able to pay its debt obligations & could even default.

Just a week ago, a bill was passed which aims to cut $4.8 trillion in spending. In addition, the bill also proposes a raise in the debt ceiling.

As per Scope Ratings, the short-term issuer ratings of the USA are currently set to S-1+, but that could change after the review.

If we look elsewhere, Fitch and Moody still have the AAA rating for the USA. That's the highest level of rating that can be assigned to a country.

But if we look at the past, it becomes clear that the USA manages to raise its debt ceiling. For the most part, it appears that the opposition parties will strike a bargain with the government. The bargain could mean agreeing to some of the terms set by the other parties in the house!

However, a further delay in raising the debt ceiling beyond the June 1 could make things difficult for the USA. In fact, the jitters of that will be seen all around the world.

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