Federal deficits are falling faster than expected, leading S&P to upgrade its economic outlook for the US. That's good news for the country's credit rating.
America’s reputation as a creditworthy borrower just got a boost: Standard & Poor’s said Monday that an improved federal budget position has reduced the likelihood of another credit-rating downgrade for the United States.
S&P officially changed its outlook on US Treasury debt from “negative” to “stable.”
To translate the Wall Street lingo, that means the credit-rating agency doesn’t see a big risk that it will have to lower its grade for Treasury bonds this year.
That doesn’t mean everything is rosy for US finances, but it’s a step of progress.
"The likelihood of a near-term downgrade of the rating is less than one in three,” S&P said in its analysis, conducted by Nikola Swann and John Chambers. But the firm said the US has weaknesses that include its “fiscal performance, its debt burden, and the effectiveness of its fiscal policymaking.”