Moody’s Investors Service has raised the US sovereign outlook to stable from negative and affirmed the country’s triple-A rating, citing steady growth despite reduced government spending.
The rating agency’s move eased the threat of a cut to the world’s biggest economy.
Moody’s said the federal government’s debt trajectory is on track with criteria the rating agency previously laid out, even without further budget measures from Washington.
The economy is growing moderately, but it is still “progressing at a faster rate compared with several Aaa peers and has demonstrated a degree of resilience to major reductions in the growth of government spending,” Moody’s said in a statement.
The US budget outlook has brightened in recent months, alleviating some of the pressure on policymakers for more fiscal compromises.
On May 14, the non-partisan Congressional Budget Office said the US federal budget deficit is shrinking at a faster pace than expected, and forecast this fiscal year would end with the smallest shortfall since 2008.