US Sovereign Debt Rating Maintained, But Interest Costs Raise Risks

Scope Ratings has maintained its AA- rating for the United States' sovereign debt, but sounded a warning about rising risks to public finances. The agency cited increasing interest costs and dependence on conditions in the bond market as key concerns.

The US economy remains strong, with the dollar's status as the world's reserve currency and institutions like the Federal Reserve System contributing to its stability. However, Scope Ratings expects budget indicators to deteriorate due to structural spending pressures and limited political willingness for fiscal reforms.

The primary deficit, excluding interest payments, is expected to remain around 3.5% of GDP. Rising interest costs are a major concern, with the yield on 10-year US Treasury bonds reaching 5.27%, exceeding the Congressional Budget Office's forecast. This could add $3.5 trillion to the country's debt over the next decade.

Scope Ratings also highlighted the risk of the public debt limit being reached in early 2027, with lawmakers potentially engaging in prolonged partisan disputes over raising or suspending the limit. The agency noted that recurring debates over the debt limit expose weaknesses in fiscal governance and cause market volatility.