Moody's warns of potential downgrade as U.S. debt and political polarization threaten credit rating

Moody's Investors Service has placed the U.S. government's credit rating on a negative outlook, warning of the possibility of another downgrade due to risks to the fiscal outlook, including higher interest rates without effective fiscal policy measures. The rating agency cited continued political polarization in Congress as a factor that could hinder consensus on a fiscal plan. A lower debt rating increases the risk of higher borrowing costs for the federal government. The warning comes as the government faces the threat of another shutdown, and follows a previous downgrade by Fitch ratings service. The U.S. currently retains its highest credit rating, but the outlook is now negative.