U.S. Treasury Secretary Janet Yellen on Monday pushed back on last week's Moody's decision to cut its outlook on U.S. debt, saying the country's economy is strong and the Treasury market is both safe and liquid.
"This is a decision I disagree with," she said at a news conference at the close of the Asia-Pacific Economic Cooperation (APEC) Finance Ministers' Meeting (FMM) in San Francisco, California.
The rating agency on Friday lowered its outlook on the U.S. credit rating to "negative" from "stable," citing large fiscal deficits and a decline in debt affordability.
The rise in long-term interest rates would create a challenge to debt sustainability if it lasts, Yellen acknowledged.
However, the Biden administration is "completely committed to a credible and sustainable fiscal path," she said, citing plans to reduce the deficit and investments in the Internal Revenue Service, which collects taxes.
Yellen also called on House Republicans to work to avoid a partial government shutdown that could come as soon as the end of this week.
It is the third fiscal showdown this year, following a monthslong spring standoff that brought the federal government to the brink of default.
The possibility of a government shutdown is "an unnecessary economic headwind in a moment when the U.S. economy is doing well and moving in the right direction," Yellen said.
The U.S. Treasury on Monday said the federal budget deficit in October shrank by nearly a quarter from a year earlier, as revenues climbed to a record for the month because of the influx of delayed tax payments from disaster-stricken areas.
Data last month showed the deficit in fiscal 2023, which ended Sept. 30, was the largest outside the COVID-19 era at nearly $1.7 trillion.
