Post-election, risks to US fiscal health grow: Moody’s

New York., The fiscal health of the United States is at greater risk following the election of Republican Donald Trump as the country’s next president and given the likely composition of Congress, the rating agency Moody’s indicated.

U.S. budget deficits and public debt levels were expected to rise under whichever candidate won the Nov. 5 election, according to several estimates, but the expectation was that Democrat Kamala Harris would add less debt.

Trump’s victory has contributed to a sell-off in government bonds this week, as key elements of his economic plans such as tax cuts and tariffs are expected to boost growth, but also higher inflation and larger budget deficits. .

Republicans appeared poised to gain control of both chambers, a scenario that could allow for faster implementation of new policies.

In the absence of policy measures to help limit fiscal deficits, the deterioration of the federal government’s fiscal strength will increasingly weigh on the US sovereign credit profileMoody’s said in a Nov. 7 note.

Given the tax policies that Trump promised during the campaign, and the high probability that they will be passed due to the changing composition of Congress, the risks to the fiscal strength of the United States have increased.he added.

Moody’s is the last of the three major agencies to maintain a top rating for the US government.

In November last year it lowered the outlook on its triple-A US credit rating to negative from stable.

Increases the risk of potentially sharp and radical changes in tax, trade, immigration and climate policies, which could especially affect manufacturing, technology and retailhe said of Republican control of the White House and the Capitol.