Key Takeaways
- The US public finances are facing a deteriorating outlook, with fiscal strength on the decline.
- Moody’s has warned that the US debt pile is growing, and higher interest rates could make it harder for the country to cope.
- Donald Trump’s trade tariffs and plans for tax cuts could do more harm than good for government revenues.
Washington: America’s “fiscal strength is on course for a continued multiyear decline,” the Financial Times reported, citing credit rating group Moody’s.
U.S. President Donald Trump’s trade tariffs could hamper the country’s ability to cope with a growing debt pile and higher interest rates, the rating agency said on Tuesday.
Analysts warned that the tariffs, together with plans for tax cuts, could do more harm than good for government revenues.
“In fact, fiscal weakening will likely persist even in very favourable economic and financial scenarios,” they said.
Moody’s warning comes amid heated Capitol Hill debates over how to steer the United States toward fiscal sustainability.
