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1 in 3 chance of future downgrade: S&P warns US

Last Updated: Monday, August 8, 2011 - 00:00

Washington: Issuing a fresh warning, Standard and Poor's on Sunday said that there is one-third chance of further downgrading of US's sovereign credit rating, two days after it downgraded it from AAA to AA+, sending shock waves across the country.
Giving a bleak future of America's credit rating, a top official of S&P said, "We have a negative outlook,...which...  leads to a longer time frame, from 6 months to 24 months."  If the fiscal position of the United States deteriorates further or if the political gridlock becomes more entrenched, then that could lead to a downgrade.
The outlook indicates at least a 1 in 3 chance of a downgrade over that period," John Chambers, managing director of S&P told the ABC news in an interview.
Chambers said S&P has been saying for some time that the fiscal trajectory of the United States was on a bad path and that the political gridlock in Washington leads it to conclude that policymakers don't have the ability to pro actively put the public finances of the US on a sustainable footing.
"We said that in April. We said that again in July.  We think our message has been pretty consistent.   And we also think that the numbers speak for themselves," he said, defending S&P's unprecedented decision to downgrade US credit rating from AAA to AA+ on Friday.
Responding to a question, Chambers said it would take a while for the US to get back its AAA rating.


First Published: Monday, August 8, 2011 - 00:00
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