Standard & Poor’s (S&P) Global Ratings affirmed its AA+/A-1+ sovereign credit ratings on the United States on July 18, 2016. The outlook remains stable.

According to S&P, the U.S. benefits from a strong and diversified economy, deep and liquid capital markets, and effective institutions. These factors support the country’s high creditworthiness.

However, S&P also noted that the U.S. faces challenges related to long-term fiscal sustainability. These challenges include:

• An aging population
• Rising healthcare costs
• Political polarization

The stable outlook reflects S&P’s expectation that the U.S. economy will continue to grow at a moderate pace and that policymakers will address the country’s fiscal challenges over time.

S&P could lower the rating if the U.S. economy weakens significantly or if policymakers fail to address the country’s fiscal challenges. Conversely, S&P could raise the rating if the U.S. economy strengthens significantly and policymakers implement policies that improve the country’s long-term fiscal outlook.