(Reuters) -European rating agency Scope downgraded the United States’ credit rating by a notch on Friday, citing sustained deterioration in public finances and a weakening of governance standards.
Scope cut the U.S. local and foreign currency long-term issuer and senior unsecured debt ratings to “AA-“, from “AA”, but revised the outlook to “stable” from “negative”.
Scope Ratings, a smaller European agency, just lowered the U.S. credit rating to AA minus. That means they see the country’s rising debt and political gridlock as a growing risk. It adds pressure by making investors more cautious. If enough agencies agree, it could lead to higher interest rates when the government borrows money.
On Monday, markets probably won’t react much since Scope isn’t one of the big three. But bond traders will be watching for signs like rising Treasury yields or changes in the dollar. It’s not a shock, but it’s another warning light.
