S&P Global Ratings affirmed the US' AA+ credit rating, saying it expects "meaningful" revenues from President Donald Trump's tariffs would likely offset weaker revenue from the recently passed tax and spending bill.
The ratings agency maintained the outlook at stable, "reflecting our expectation of continued resilience in the US economy; credible, effective monetary policy execution; high, but not rising, fiscal deficits... and the $5 trillion increase in the debt ceiling," it said in a notice published late Monday.
"Despite heightened polarization and changes in various policies under the second Trump administration, we continue to see key institutions, and checks and balances anchoring policy outcomes," S&P said.
S&P Global Ratings expects US GDP growth to decelerate from 2.8pc in 2024 to 1.7pc in 2025 and 1.6pc in 2026 "as labor force growth slows alongside the decline in immigration and as tariff-policy uncertainty subsides."
It sees growth of around 2pc the following two years.
"Our base case is that the economy avoids a recession," it said.
S&P said it may lower the rating over the next two to three years if already high fiscal deficits continue to climb.
"The ratings could also come under pressure if political developments weigh on the strength of American institutions and the effectiveness of long-term policymaking or independence of the Federal Reserve," it said.
S&P said it expected net general government debt to exceed 100pc of GDP by 2028, up from 94pc in 2024. The previous peak was 106pc of GDP during World War II.
