Tags: Trump Administration | S&P | credit rating | donald trump | economy

S&P: US Under Trump Won't Get AAA Rating Back Any Time Soon

Wednesday, 11 Jan 2017 08:17 AM

A top Standard and Poor's official said he doesn’t expect the United States would have it AAA credit rating restored anytime soon as President-elect Donald Trump prepares to take office.

Five years ago, S&P justified its downgrade to AA+ amid fears of its soaring budget deficit and surging debt. But America isn’t doing "very much to actually dispel those concerns," Moritz Kraemer, chief sovereign rating officer at S&P global ratings told CNBC.

The current policy making "is very uncertain," he added.

"For a triple-A rated sovereign you'd expect a little more of visibility, you'd expect sort of more continuity in policies," he said, adding that for now the outlook is stable and any changes are unlikely to take place any time soon.

Despite expectations of higher growth in 2017, the credit ratings agency is concerned with an uptick in government deficit as a result of President-elect Donald Trump's policies. He has pledged to cut corporate and income tax, while also investing in infrastructure.

"If you have more growth, less debt, what's not to like. But that is of course easy to say. The policy mix that seems to be coming through doesn't suggest that this is a sustainable outcome," Kraemer told CNBC.

"What we will likely see if indeed we have important tax cuts and if we have maybe additional spending on infrastructure and other spending programs that would mean other things being equal, that you'd have a larger deficit and potentially a larger debt stock," Kraemer added.

Sovereign downgrades in 2017 are "likely to outpace" upgrades posted in 2016, S&P warned in a report Tuesday, IBT reported.

In note to its clients on Tuesday (10 January), S&P Global Ratings said global sovereign creditworthiness, in decline since the onset of the global financial crisis in 2008, has deteriorated slightly. 

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A top Standard and Poor's official said he doesn't expect the United States would have it AAA credit rating restored anytime soon as President-elect Donald Trump prepares to take office.
S&P, credit rating, donald trump, economy
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2017-17-11
Wednesday, 11 Jan 2017 08:17 AM
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