The retreat by Republicans from threats to push the United States into a debt crisis has stayed the hand of at least one credit ratings agency, but that does not mean the United States is suddenly safe.
The country has retained its top triple-A rating from Moody’s Investors Service and Fitch Ratings, despite rising debt levels. It was downgraded by one notch in 2011 by Standard & Poor’s after a chaotic debt ceiling battle. On Monday, Fitch said the recent debt ceiling extension eliminates the immediate risk to the rating.
But going forward, the emerging signs of lawmakers working together are not likely to be enough to head off more downgrades of U.S. government debt, which is used as a benchmark for borrowing costs and considered the safest of safe havens.
There is no exact formula for what will trigger a downgrade, but statements and reports released by the agencies give some clues. Specifically, the U.S. debt-to-GDP ratio, currently at about 68 percent, is better than triple-A rated nations such as Canada, but far worse than Australia or Norway.