According to a report by Xinhua News Agency on October 25th, the European credit rating agency Scope Rating Company recently released a report downgrading the sovereign credit rating of the United States from "AA" to "AA-" because of the continuous deterioration of the public finance situation in the United States and the decline of government governance standards.

The U.S. government debt is much higher than that of most sovereign countries

Government governance standards fall

The agency says the continued deterioration of U.S. public finances is mostly reflected in the continued high fiscal deficits, rising interest spending and limited budget flexibility.

The report predicts that without substantial reforms, the U.S. government debt to GDP ratio will rise to 140% by 2030, much higher than that of most sovereign countries.

The report pointed out that the decline of government governance standards is also an important reason for the downgrade. The agency believes that the administrative power in the United States is increasingly centralized, and the Trump administration has repeatedly ignored court orders, challenged judicial authority, and evaded congressional supervision, which has reduced the predictability and stability of policy formulation and increased the risk of policy mistakes. The uncertainty shown by the United States in tariff negotiations with major trading partners is an example.

The agency also said that the U.S. rating outlook is ¡°stable¡± and that the overall balance between rating increases and downsetting risks over the next 12 to 18 months.The report emphasizes that downside risks include a continued rise in debt levels, and that the U.S. dollar¡¯s position as a global reserve currency could be significantly weakened, leading to a global decline in demand for U.S. government bonds.

The scope rating company is headquartered in Berlin, Germany, and will become the first European credit rating agency to be accredited by the European Central Bank in 2023.

White House: Inflation data may not be released next month

For the first time in over 70 years.

On October 24, local time, Central journalistIt was learned that the White House said that as the government shutdown has entered its fourth week, it may not be able to release inflation data next month, which will be the first time in more than seven decades.

The Trump administration said the Bureau of Labor Statistics would not be able to complete the inflation report because investigators could not go out to collect data. Affected by the shutdown, the release of inflation data for September has been delayed by nine days.

Analysts pointed out that the lack of inflation data will put the Fed facing greater uncertainty when adjusting interest rates and assessing price trends.

CPI rose less than expected by 3% year-on-year in September, while core inflation rose 0.2% month-on-month, the slowest pace in three months. The news sharply raised expectations that the Fed would cut interest rates twice this year. As of press time, the Chicago Mercantile Exchange's Fed Observation Tool shows that the probability of the Fed cutting interest rates by 25 basis points next week is 98.9%.

On Friday, the three major shares of the U.S. Stock Exchange index again high innovation. the SIP 500 index rose 53.25 points, rose 0.79%, report 6791.69 points, break the record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record record

US ratings giant downgrades outlook on France

At the same time, Moody's, an international credit rating agency headquartered in the United States, released a report on the 24th to maintain France's sovereign credit rating of Aa3, but Downgraded rating outlook from "stable" to "negative"¡£

Moody¡¯s has been the third major international rating agency to adjust the French sovereign credit rating recently, with both Standard & Poor¡¯s lowering the French sovereign credit rating to ¡°A+¡± and a ¡°stable¡± rating outlook.

Moody's said in the report that the downgrade outlook reflects the risk of further weakening of French institutions and governance capabilities and a regression in structural reforms.The report believes that a "long-term split in the political landscape" in France may affect the normal functioning of national institutions, while warning that the size of the French fiscal deficit will remain high over a longer period of time.

French Minister of Economy and Finance Roland Lescure said in a statement on the same day that Moody's decision showed that "it is absolutely necessary for France to reach a compromise on the budget", and the government will insist on achieving the goal of 5.4% of the gross domestic product (GDP) in 2025, and strive to reduce the deficit ratio to less than 3% of GDP by 2029.

A report released by the International Monetary Fund (IMF) on Friday showed that if the policy is not adjusted and affected by a significant rise in public debt interest spending, the French fiscal deficit is expected to expand to 5.8 per cent in 2026 and 6.2 per cent in 2027 and 2028 and to remain at around 6.3 per cent in 2029 and 2030.

Currently, France's 2026 fiscal bill is still under review in the National Assembly. The bill will be voted on by both houses of Parliament after about 70 days of discussion.

(Declaration: The contents and data of the article are for reference only and do not constitute investment advice.

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