Credit rating agency Standard & Poor’s on Monday upgraded its credit outlook for the United States government to “stable” from “negative,” saying the chances of a downgrade of the country’s rating is “less than one in three.”
In August 2011, S&P became the first credit rating agency to downgrade the sovereign U.S. credit rating from top-rated “AAA” to “AA+,” the second highest rating, and had left the U.S. credit outlook at “negative” at that time.
S&P said in a release that the recent improvements in tax receipts and steps taken to address longer-term budget issues improved the outlook for the United States. The agency raised concerns about the ability of policymakers to tackle long-standing issues due to a deepening of a partisan divide in Washington in the last decade, however.
“We believe that our current ‘AA+’ rating already factors in a lesser ability of U.S. elected officials to react swiftly and effectively to public finance pressures over the longer term in comparison with officials of some more highly rated sovereigns and we expect repeated divisive debates over raising the debt ceiling,” the agency said in a statement.
Rival agencies Moody’s and Fitch currently both hold triple-A ratings on the United States.