Moody’s: Will US elections impact US credit rating?


The markets are anticipating the consequences of the US presidential elections, due to the event’s huge importance in the political and financial world. Will the US elections impact US credit rating?

7 September, AtoZForex – The latest report by Moody’s Investor Service, the US credit rating agency, was published this Wednesday. The report had a big focus on the approaching US presidential elections. To be more specific, Moody’s report highlighted that Hillary Clinton’s and Donald Trump’s contradictory policy proposals will have no effect on the US AAA credit rating.

The upcoming presidential elections in the US are a big political and financial event, however, with no influence on the credit rating matter. Sara Carlson, an analyst at Moody’s stated: “The next administration’s fiscal policies will shape the US’s credit profile more than has been the case for recent administrations.” Nor outcome of the elections, neither the process will endanger US long-held triple – A rating from Moody’s, as it is reported by experts at the credit rating agency. They also stated that both Donald Trump and Hillary Clinton would have a huge influence on the US credit profile.

US credit profile can be weakened

The Congressional Budget Office forecasts that expenses on federally-sponsored health and retirement programs will boost the country’s budget deficit over the next 10 years. This issue, if handled poorly, could possibly influence the AAA rating. Ms. Carlson added:

“Neither candidate has detailed how they would tackle fiscal challenges stemming from entitlement spending, although their proposals continue to take shape. Without countermeasures, these costs will weaken the US’s credit profile over the coming years.”

See also: 3 reasons for a worrisome US Stock Markets outlook

Ms. Clinton and Mr. Trump both have assured an infrastructure spending. Ms. Clinton has suggested a $275 billion spending, where her opponent, Mr. Trump has proposed a $550 billion sum for spending. The rating agency officials believe this could also depress the US credit profile if not funded through fresh profits.

While the question “will the US elections impact US credit rating?” was answered by Moody’s as “no”, Hillary Clinton currently is at the winning position in the US presidential race.

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