Ratings agencies urge caution over US debt

Moody's Investors Service said in a report that the US will need to reverse the expansion of its debt if it hopes to keep its "AAA" rating. "We have become increasingly clear about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the US, the likelihood of a negative outlook over the next two years will increase," Sarah Carlson, senior analyst at Moody's, said. Separately, Carol Sirou, head of Standard & Poor's France, said that the firm couldn't rule out lowering the outlook for the US rating in the future. "The view of markets is that the U.S. will continue to benefit from the exorbitant privilege linked to the US dollar" to fund its deficits, Sirou said. "But that may change." Sirou has an administrative role and has no say in sovereign ratings. The US currently has the highest possible credit rating and a stable outlook, but credit rating agencies have warned repeatedly in recent years that the government's long-term budget issues must be addressed.