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Trump Tax Plan Probably Credit Negative for U.S., Moody’s Says

  • Tax cuts seen putting upward pressure on federal deficit, debt
  • Banks, insurers, asset managers would benefit from lower rates
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Markets Try to Make Sense of Trump Tax Plan

President Donald Trump’s tax proposal would probably weigh on the U.S. government’s credit outlook, on concerns that it would cause the federal deficit to swell, according to Moody’s Investors Service.

“The Trump tax framework is likely credit negative for the U.S. government,” Moody’s said in a statement. “Tax cuts would not be offset by equivalent cuts to spending, which would put upward pressure on the federal budget deficit and debt,” while “the tax reform’s effect on economic growth and, in turn, federal government revenue would also affect U.S. credit strength.”