Moody’s raises outlook for US debt

Credit rating agency Moody’s has raised its outlook for US government debt from negative to stable and reaffirmed its top Aaa rating.

Moody’s had downgraded the outlook for US debt in August 2011, during the political infighting over the US debt ceiling.

But the agency said yesterday it was revising the outlook back to stable because the country’s budget deficit was declining faster than it expected and growth was stronger than its Aaa peers.

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The decision means that Standard & Poor’s (S&P) remains the only credit rating agency to have downgraded the US credit rating, which it did in 2011, although S&P also upgraded the long-term outlook for US debt from negative to stable in June this year.