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Lost AAA Brings Falling Yields-to-Deficits on Downgrade

Ever since Standard & Poor’s stripped the U.S. of its AAA credit rating almost two years ago, the unemployment rate has fallen, household wealth has reached a record and the budget deficit is shrinking. More downgrades may be coming, anyway.

While S&P boosted its outlook for the U.S.’s AA+ grade earlier this week to “stable” from “negative,” Moody’s Investors Service said it’s awaiting lawmakers’ budget decisions this year as it weighs reducing America’s Aaa. Fitch Ratings, which has a “negative” outlook on the U.S., said in February that the debt trajectory isn’t consistent with a AAA borrower.