The United States was spared another credit rating downgrade by Standard and Poor’s despite the US Congress super-committee not being able to find a deal cut $1.2 trillion in spending.
S&P kept their U.S. credit rating unchanged at AA+ citing that the super-committee’s inability to reach agreement didn’t merit another downgrade because the inaction will automatically trigger $1.2 trillion in spending cuts in areas such as military spending to take effect starting in January 2013.
The U.S. lost its top notch triple A rating on August 5 when S&P cut the rating due to the US debt load.
Moody’s kept its AAA rating with a negative outlook. Meanwhile in August Fitch Ratings said that a super-committee failure would probably result in a “negative rating action,” likely a revision of its outlook to negative, and that it will conclude a review by the end of this month.
On Monday global equity markets slumped after news that the super-committee meeting on Sunday had failed. Risk currencies sand commodities all fell while euro-zone bond yields rose.
However with the opening of early markets on Tuesday, stocks and currencies performed better on the news that S&P did not downgrade the U.S. The benchmark Stoxx Europe 600 Index rose in the London session open after tumbling 3.2 percent yesterday. The euro moved higher as sentiment improved.