Washington: Ace credit rating agency Moody’s Investors Service has lowered its rating outlook for the United States government from stable to negative.
The Biden administration has rejected the rating agency’s estimates asserting that the U.S. economy is "stable" and “strong”.
"Moody's Investors Service has today changed the outlook on the Government of United States of America's ratings to negative from stable and affirmed the long-term issuer and senior unsecured ratings at AAA," Moody's said Friday November 10, 2023.
Explaining the reasons behind its decision, Moody’s pointed to rising interest rates, ineffective fiscal policy measures, political polarization and stagnant revenues.
“The combination of rising interest rates and large fiscal deficits has led to a decline in the affordability of US debt”, it said.
Political polarization within US state institutions such as the US Congress is also a contributing factor to Moody's decision to downgrade the US government's rating.
"Continued political polarization within US Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability," the ratings agency said.
White House spokesperson Karine Jean-Pierre on the other hand blamed the rival Republicans and said the change was "yet another consequence of congressional Republican extremism and dysfunction."
On the other hand, Deputy Secretary of the Treasury Wally Adeyemo claimed that the American economy "remains strong".
“While the statement by Moody’s maintains the United States’ AAA rating, we disagree with the shift to a negative outlook. The American economy remains strong, and Treasury securities are the world’s preeminent safe and liquid asset," Wally Adeyemo said in a statement.
Meanwhile, The US smartphone market shrank another 5 per cent (year-on-year) in Q3, continuing its downward trajectory, according to a new report.
Despite this trend, shipments grew 21 per cent sequentially to 31 million units, driven by Apple’s latest iPhone release and carrier promotions targeting premium device upgrades, according to market research firm Canalys.
Apple’s shipments declined by a modest 8 per cent, amounting to 17.2 million units. The late arrival of the iPhone 15, compared to the timing of the iPhone 14, contributed to the decline.
Samsung's volume recovered slightly compared to Q2 2023 as it shipped 6.8 million units. Its new foldables boosted its performance, which accounted for over 20 per cent of its shipments.
Google Pixel captured 4 per cent market share, shipping 1.2 million units.
“The US smartphone market is stabilizing, but there is no expectation that Q4 will make a turnaround,” said Runar Bjorhovde, analyst at Canalys.
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