New York: Announcements should be expected Monday morning about more knock-on effects to corporations from S&P’s decision to downgrade the United States’ credit rating, the head of Standard & Poor’s (S&P) sovereign ratings said on Monday.
David Beers also told Reuters Insider television that the US outlook could be raised to stable if the US deficit-cutting deal is fully implemented and the Obama administration ends the Bush tax cuts.
However, Beers said there was a one-in-three chance the US rating could go lower again within six to 24 months.
He added that S&P would be watching to see if the US Congress follows through on the budget consolidation process it committed to while the course of interest rates and the so-far subpar economic recovery would also be factors.
“What may affect whether the rating falls again is first of all the underlying economic story,” Beers said.
“This has been a fairly lackluster recovery, and so we’re watching that very closely because of course it also will influence the future path of public finances.”