Shrinking U.S. Budget Deficit Credit Positive, Moody’s Says

The U.S.’s shrinking federal budget deficit is a positive factor for the nation’s Aaa credit rating, according to Moody’s Investors Service.

The Treasury’s bookkeeping “indicates that the federal deficit is falling more quickly than the government expected, a credit positive development,” Steven Hess, Moody’s New York-based lead sovereign analyst for the U.S., wrote today in a report. “Because GDP growth has been accelerating, the deficit as a percent of GDP is likely to be declining even more quickly.”