Moody's threatens lower U.S. credit rating

Lee Cary
Boehner and House Republicans should activate their "Do Nothing" blame shield - pronto. Today, Moody's threatened to lower the U.S. debt rating in this statement. "New York, September 11, 2012 -- Budget negotiations during the 2013 Congressional legislative session will likely determine the direction of the US government's Aaa rating and negative outlook, says Moody's Investors Service in the report "Update of the Outlook for the US Government Debt Rating." If those negotiations lead to specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable, says Moody's. If those negotiations fail to produce such policies, however, Moody's would expect to lower the rating, probably to Aa1. Moody's views the maintenance of the Aaa with a negative outlook into 2014 as unlikely. The only scenario that would likely lead to its temporary maintenance would be if...(Read Full Post)

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