Ratings Agency Standard & Poor’s has warned it has changed its outlook for its credit rating for the US over the next couple of years. The agency has revised its outlook from stable to negative. A downgrade would be a blow to what is considered the world’s economic powerhouse.
However, a strong message came from White House Spokeman Jay Karney. He said : “The American economy is strong, it’s strong, it’s diversified, it’s dynamic, it continues to be the most important and powerful economy in the world.”
S&P blamed factors including the large US budget deficit and government debt. A downgrade would cause interest rates to rise and the tightening of credit, possibly derailing the recovery from the worst recession since World War Two.