Scope downgrades U.S. credit rating to AA-

German-based rating agency Scope Ratings on Friday downgraded the U.S. credit rating to AA- from AA.

The downgrade was driven by the sustained deterioration of public finances, reflected in persistently high federal deficits, a rising net interest payment burden, and weakening governance standards, the agency said in a report.

The U.S. government deficit widened to 8.0 percent of GDP in 2024, well above the pre-pandemic average of around 4.8 percent between 2015 and 2019. The One Big Beautiful Bill Act has contributed to a weakening of the fiscal outlook. Scope expects the deficit to remain high at 7.4 percent of GDP in 2025, and average around 7.8 percent over 2026-2030, up from 7 percent at the time of its last rating action in May 2025.

Without additional corrective fiscal measures, the U.S. government debt ratio will reach 140 percent of GDP by 2030, up from 122 percent in 2024, according to the report.

Constrained budgetary flexibility, further exacerbated by the enactment of the One Big Beautiful Bill Act (OBBBA), limits the administration's ability to implement sufficient spending cuts or revenue measures to stabilize the public debt ratio in the coming years.

Meanwhile, the weakening of governance standards lowers the predictability of U.S. policymaking, increases the risk of policy missteps, and reduces Congress's capacity to address the country's structural fiscal challenges, the report says.

Scope downgrades U.S. credit rating to AA-

Scope downgrades U.S. credit rating to AA-

Even under assumptions that the U.S.-Israel war on Iran does not persist past April and that traffic through the Strait of Hormuz gradually resumes, the world will face the pressure of rising oil prices throughout this year, the U.S. Energy Information Administration (EIA) said on Tuesday.

In its latest Short-Term Energy Outlook released on Tuesday, the EIA raised the forecast of Brent crude oil spot price for 2026 to 96 U.S. dollars per barrel from the previous forecast of 79 U.S. dollars a barrel.

Retail gasoline and diesel prices will continue the rising trend this year, said the outlook.

The outlook maintains a risk premium on crude oil prices throughout the forecast period, as the EIA expects uncertainty around future supply disruptions to keep prices above pre-conflict levels.

"Once flows through the Strait of Hormuz resume, we assume it will take time to resolve the backlog and disruption to oil tanker routes and trade flows and that the potential for future disruptions will remain at risk and create a premium in the oil price," it said.

US Energy Information Administration forecasts rising oil prices throughout 2026