S & P said the loosening of U.S. fiscal policy could lead to negative ratings

Moritz Kraemer, S & P's sovereign rating leader for Global Ratings, said in an interview that the proposed tax cuts in the United States will widen the federal deficit and that more accommodative fiscal policies could trigger negative actions against U.S. credit ratings unless Washington can address long-term Budget issue.

Data Picture: August 2011, New York, Standard & Poor's office building. REUTERS / Brendan McDermid
Kraemer told Reuters late Monday that despite Congress's unanimity on the final version of the tax reform, tax cuts appear to be more likely to trigger inflation than a substantial boost to the already full-fledged U.S. economy.

This, in turn, could lead to faster-than-expected rate hikes by the Federal Reserve (FED / FED) and the withdrawal of capital from emerging markets, putting Kraemer at a risk for countries like Turkey that require significant external financing.

S & P downgraded the United States to AA + in 2011. It is the only institution in the three rating agencies that does not have a highest AAA rating on the United States.

"If the tax reform in the United States is approved, then the federal budget deficit seems sure to increase," Kraemer told Reuters. "In the absence of a balanced measure to address the long-term fiscal challenges in the United States, major fiscal easing could lead to negatives Rating action. "