This Friday, Moody's cut the United States' outlook for the quality of its sovereign debt from stable to negative. The reason for this decision is the huge budget deficits and the reduced capacity to service the debt..

A cut in the outlook to negative could lead to Moody's deciding to downgrade the sovereign rating in a forthcoming decision.

"The continued political polarization in the US Congress increases the risk that successive [federal] governments will not be able to reach consensus on the budget plan in order to halt the decline in the ability to ensure debt repayment," the agency stresses in the report published this Friday, November 10.

This downward revision of the outlook for US debt follows a downgrade of the US sovereign rating by Fitch in August - after months of political deadlock over the country's debt ceiling.

According to Negócios newspaper, Moody's is currently the only one of the three major rating agencies to maintain its top rating for the US. In August, Fitch cut its rating to the second level of the ratings scale, from triple A to AA+, thus joining Standard & Poors - which had already done so in 2011 and has not raised its rating since.

The debt ceiling was set at 31.4 billion dollars, but it was exhausted on January 19. In order to resolve the situation, an increase or suspension of this ceiling had to be approved, but Democrats and Republicans maintained an intense tug-of-war over this issue - which was only resolved at the end of May.

On May 31, the US House of Representatives approved the proposal to suspend the US debt ceiling. The following day, the Senate also gave the green light. With the proposal passing Congress, the country was prevented from defaulting as of June 5.

The proposal approved - and signed into law by President Joe Biden on June 4 - suspended the federal government's debt ceiling until January 2025 - a much longer period than usual (due to the fact that it was a suspension and not an increase in the so-called debt ceiling), and thus left the US more "unburdened" and without the constant threat of a default and a shutdown of public services.

However, the issue of approving the federal budget, which comes into effect in the US in October, continues to cast a shadow over the outlook in the country.

Republicans, who control the House of Representatives - which, together with the Senate, makes up the US Congress - hope to pass a stopgap spending measure (a legislative measure known as a continuing resolution) this Saturday while the budget is not approved, in order to prevent a partial government shutdown and keep federal agencies running when the current temporary funding agreement expires next Friday, November 17.