US Fiscal Strength Seen Weakening Further, Moody’s Says

The fiscal strength of the United States is stuck in a multi-year slide and “has deteriorated further” after the country’s sovereign rating received a negative outlook in late 2023, Moody’s Ratings said.

“Higher interest rates have markedly weakened debt affordability, accelerating the decline in fiscal strength,” analysts led by William Foster wrote in a report published Tuesday. The company said debt affordability is “the most important determinant of our assessment of US fiscal strength,” and that is derived from the metrics of interest payments-to-revenue and interest payments-to-GDP.