In August this year, Standard & Poor’s became the first among the big three credit rating agencies – that includes Moody’s and Fitch – to downgrade the US economy as concerns grew over the government’s budget deficit and the nation’s rising debt burden. If the economists from Bank of America Merrill Lynch are to be believed, either Moody’s or Fitch will follow in S&P’s example, especially if the bipartisan congressional committee formed to address the deficit – known as the "super committee" – cannot reach a deal to reduce the U.S. deficit by at least $1.2 trillion by November 23.
Harris added that the likelihood of the “super committee” reaching a suitable conclusion was extremely low, compounding the chances of another ratings downgrade.
While the prospects of a second downgrade appears to be highly likely in the view of Bank of America Merrill Lynch economists, exactly which rating agency will make the dreaded move is still unknown.
Moody's, which already has a negative outlook on the United States's AAA rating, told Reuters that several other factors, including the 2012 presidential elections and the expiration of the Bush-era tax cuts late in 2012, would play a role in its eventual decision.