US News

Standard & Poor’s puts US credit ratings on negative watch

Standard & Poor’s (S&P) Ratings Services said late Thursday it has placed US sovereign credit ratings on watch for possible downgrade — saying the action “signals our view that, owing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the US within the next 90 days.”

S&P had already lowered its outlook on the US triple-A long-term rating to negative in April, but since then “the political debate about the US’ fiscal stance and the related issue of the US government debt ceiling has, in our view, only become more entangled,” it said, according to MarketWatch.

The US Treasury responded to the move Thursday by saying it “restates what the Obama administration has said for some time: that Congress must act expeditiously to avoid defaulting on the country’s obligations and to enact a credible deficit reduction plan that commands bipartisan support.”

On Wednesday Moody’s Investors Service said it was putting its top triple-A rating on the US government’s bond rating on watch for possible downgrade, citing the “rising possibility that the statutory debt limit will not be raised on a timely basis” — which would lead to a default on US Treasury debt obligations.

S&P’s move came as President Barack Obama wrapped up a fifth day of debt talks with lawmakers, while US stocks fell for the fourth in five sessions.