Bailing out Fannie & Freddie could eventually cost taxpayers over $600 Billion, according to Standard & Poor's latest report. Without a plan to deal with the problem, the US AAA credit rating could face a lower rating.
S&P Cites Fannie and Freddie as Grounds for Negative Outlook on U.S.
The headline business news Monday was Standard & Poor’s notice that its outlook for the United States has turned negative. The agency maintained its AAA sovereign rating on the U.S. but warned that there is at least a one-in-three likelihood the long-term rating could be lowered over the next two years.
The main culprit is the nation’s growing debt and discord in Washington over the budget, but nestled within S&P’s document explaining its rationale, the agency also cited outlays to mortgage giants Fannie Mae and Freddie Mac as a substantial risk.
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