CNBC reports that China's Dagong Global has cut the credit rating on U.S. sovereign debt to A from A+, Chen Jialin, general manager of the international department at the firm told CNBC on Wednesday. The agency has also put the U.S. on negative outlook.
The decision came despite the U.S. raising the debt ceiling and averting a default, and even as both Fitch and Moody's re-affirmed the U.S.'s Triple-A rating. (An A rating puts the U.S. five notches below Triple-A and shudder, at the same level as Russia.)
Explaining its decision Dagong said the debt deal had not changed the general trend in which the increase in debt outpaced the increase in GDP and tax revenue. Dagong said that while the increase in the debt ceiling matched the cuts, "there is an eight-year difference between the two objectives." According to the firm, the U.S. needs to cut its fiscal deficit by at least $4 trillion within the next 5 years to maintain its current debt size.
Read more at http://www.cnbc.com/id/43996450
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