Scope Ratings warns US debt path is unsustainable, keeps rating at AA-

Scope Ratings has warned that the US’s “exceptionally large” budget deficits and rising debt are making the country increasingly vulnerable to shifts in investor sentiment.

In a statement on Friday, the ratings agency kept the US sovereign rating at AA-, three levels below the maximum, with a stable outlook.

It said the country’s current path of accumulating debt could not continue indefinitely.

Scope said that without significantly stronger economic growth or fiscal adjustment through higher revenues or lower spending, US debt dynamics would remain unfavourable. It described the medium-term fiscal path as unsustainable and said it would leave the country increasingly exposed to changes in market sentiment.

The agency expects US debt as a percentage of economic output to reach 160% within a decade. It also projected that net interest costs would reach an “exceptionally high” level by 2031.

Scope also pointed to risks linked to the upcoming Congressional standoff over the debt ceiling.

The US no longer holds the highest credit rating from any of the major rating agencies after Moody’s Ratings downgraded the country last year. Scope’s assessment has been more negative than those of its peers, having last lowered the US rating during the 2025 debt ceiling impasse.

Scope currently rates the US two levels below Moody’s, Fitch Ratings and S&P Global Ratings. Fitch’s chief sovereign analyst said in January that another US downgrade soon after its 2023 downgrade would be unusual.

Scope is one of five ratings companies used by the European Central Bank to assess collateral and the only one among them based in Europe.