Moody's Warns of U.S. Fiscal Deterioration Under Next Administration

Political polarization and widening deficits are expected to weaken the U.S. fiscal profile, regardless of the November election outcome.

Moody's has downgraded the U.S. credit outlook to 'negative' from 'stable,' citing fiscal deterioration and political polarization.
The U.S. government is projected to run fiscal deficits averaging 7% of GDP annually over the next five years, potentially rising to 9% by 2034.
The national debt burden is expected to increase from 97% of GDP in 2023 to 130% by 2034 without significant policy changes.
Both presidential candidates, Kamala Harris and Donald Trump, will face challenges in implementing fiscal reforms due to a likely divided Congress.
Moody's warns that political influence over the Federal Reserve and abrupt policy changes could further undermine investor confidence and economic stability.