S&P Global Ratings has officially reaffirmed the United States' long-term sovereign credit rating at AA+ and retained a stable outlook, citing the underlying resilience of the national economy and expectations that fiscal deficits will remain elevated yet stable over the near term.
The ratings agency noted that the U.S. economy is expected to continue generating robust tax revenues. This revenue stream is projected to be supported by solid economic growth, augmented by collections from tariffs, which together should help stabilize fiscal deficits over the coming years. A stable outlook reflects the agency's expectations for continued economic expansion, credible monetary policy, and deficits that remain high but do not materially worsen.
Looking ahead, S&P expects U.S. net general government debt to approach 100% of gross domestic product over time. This trajectory is driven by rising interest costs and increased spending linked to an aging population. The agency also pointed to persistent political polarization, noting that bipartisan efforts to reduce deficits remain difficult despite mounting fiscal pressures. However, S&P expects Congress to continue raising or suspending the federal debt ceiling when necessary, citing the potentially severe consequences of a default for financial markets and the broader economy.
The ratings agency warned that the sovereign rating could come under pressure over the next two years if fiscal deficits widen further because lawmakers fail to curb spending or offset revenue losses from changes to the tax code. All three major credit rating agencies currently assign the U.S. their second-highest sovereign rating with stable outlooks. S&P said its assessment also reflects greater political polarization and sharper policy swings than seen in many other highly rated sovereign borrowers.
The current assessment underscores the delicate balance S&P sees in the U.S. fiscal landscape. While the immediate outlook is stable, the structural pressures from debt accumulation and political gridlock remain key factors. The agency's warnings highlight the potential for future rating adjustments if fiscal discipline is not maintained, particularly in the face of changing tax codes and uncurbed spending.