20 Aug 2025
“The stable outlook indicates our expectation that although fiscal deficit outcomes won’t meaningfully improve, we don’t project a persistent deterioration over the next several years,” S&P said in its statement.
The firm pointed to broad economic resilience, policy continuity, and strong revenue streams, including what it described as “robust tariff income” - as offsets to fiscal slippage stemming from legislative changes.
While acknowledging concerns that tariffs could dampen business confidence, growth, and hiring while spurring inflation, S&P said revenue gains would help balance the ledger, WSJ reports.
The agency’s decision comes against the backdrop of a $5 trillion increase in the debt ceiling and projections that net general government debt will approach 100% of gross domestic product, driven by “structurally rising non-discretionary interest and aging-related expenditure.”
S&P cited several strengths underpinning the rating, including the resilience of the U.S. economy, effective monetary policy, and a deficit trajectory that, while elevated, isn’t accelerating.
Yet the firm also noted risks...
“Bipartisan cooperation to strengthen the U.S. fiscal profile - namely to meaningfully lower deficits and tackle budgetary rigidities - remains elusive,” S&P said.
Below is a chart of USA sovereign credit risk
Source: zerohedge
