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Category: Money

Moody’s Investors Services Puts US Bond Rating on Review

Written on July 14, 2011 by Japhet Writ

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Congress needs to move quickly in raising the debt ceiling, as Moody's Investors Services puts the US bond rating in review.

The pressure on lawmakers to raise the fired up last Wednesday, as ’s Investors Services brings the bond rating into review. The move was made due to the “rising possibility” that Congress will be unable to raise the debt ceiling by August 2. If that will be the case, it could lead ’ debt on default. Moreover, the will be unable to pay the country’s bill in full and on time without being allowed to lend new money.

Treasury official, Jeffrey A. Goldstein, said in a statement:

“Moody’s assessment is a timely reminder of the need for Congress to move quickly to avoid defaulting on the country’s obligations and agree upon a substantial deficit reduction package.”

But even if lawmakers raise the debt ceiling in time, Moody’s pointed out that it is expecting progress on the long-term debt. Hence, the agency would likely change their outlook on US’ AAA rating from “stable” to “negative.” If lawmakers failed to raise the debt ceiling by August 2, it would put the country on “ratings watch negative.”

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